Plan With The Tax Man

Unpack the toolbox of technology that's promising to redefine retirement planning, but does it deliver? This episode takes a critical look at the wave of innovations, from personal finance management software to online calculators, and questions whether they truly simplify the planning process or introduce new complexities

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

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Transcript: 

Marc Killian  00:01

Let's unpack the tool box of technology that's promising to redefine retirement planning. But does it actually deliver? So on this episode of playing with the tax man will take a critical look at the wave of innovations, from personal finance management software, to online calculators and more. Stick around for this episode playing with a text.

00:22

Look up in the sky. It's a bird.

Announcer 2  00:24

It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:38

Hey, gang, what's going on this week here, Tony Morrow and I back once again to talk investing finance and retirement. And Tony is going to help us talk about you know, technology, is it and how is it redefining retirement planning? What are some pros and cons of various different things we'll run through and how does he feel about it as a seasoned professional, a CPA, a CFP and an EA of 30 plus years? What does he think of all this tech and the things that he's seen through his many years of helping folks to and through retirement? So that's on the docket? We're gonna get into it with Tony this week. What's going on? Brother? How are you?

Tony Mauro  01:10

I'm fantastic. Looking forward to talking tech. I love tech.

Marc Killian  01:14

Yeah. Big tech guy.

Tony Mauro  01:16

I'm a big tech guy. Okay, sometimes to my own detriment.

Marc Killian  01:19

Aren't we all?

Tony Mauro  01:20

Yeah,

Marc Killian  01:21

that is certainly the case. Well, you know, like I said, You've been doing this a long time, Tony. So you've certainly we've seen this tech boom. And I'm not trying to make you sound old, by the way. Because I know you're not, but you just been doing this a long time. And there's been a obviously a huge boom, in various different things in the last 20 years, from a tech standpoint. So it should be an interesting conversation to have, because many of your clients and the folks that check out our podcasts and things, they are 50 over, I'm 52, right, we're starting to get older, and I'm pretty tech savvy as well. But you know, you have friends that are the same age or maybe a few years older, and you can see that some people just aren't as up with it or something, you're think you're tech savvy, then something even newer comes out. And you're like, Man, I'm I'm so tired of this stuff. I don't want to learn one more new thing, right? So it can be daunting. So let's, let's talk about a few here. Let's start with the simple big elephant, 800 pound, gorilla, whatever you want to call it. In the room, which is Google, everybody, Google something at some point, and it has certainly altered how we look up information, what's your take on it from the financial standpoint, or

Tony Mauro  02:27

from the financial standpoint, I think it can be good, you know, and I'll try to do goods and Bad's of of each of these that we hit. But you know, obviously, the ease of it is you can get a lot of financial questions possibly answered. Very quickly, you have many, many choices. Many people obviously, don't scroll down very far. They take about the first two or three and take that as gospel. And I think that's where sometimes it could get you into trouble a little bit on the financial side is is what you're reading from somebody what I would consider authoritative. In other words, somebody that you know, really knows what they're talking about? Or is this just some guy or

Marc Killian  03:08

gal and it's hard to tell the paid ads? Yes, from the resources, right, because they've gotten so good. And allow now a lot of times, they better will say sponsored or something, you might notice that in the fine print or whatever. But just be careful. Again, I think it's a great way of looking at it to get some general information rolling Google's fantastic. I think at this point, it's obviously changed our world entirely. You know, there's certain things that the cell phone the smartphone, obviously changed us, I think, as a species and as as a society on all the things that change that way. But then there's certain things with inside that and Google being one of those. That is I don't know that anybody doesn't use it on a regular somewhat regular basis. So just grain of salt, right? Don't you know, don't go too far or don't believe everything you see that your Google right away. That's

Tony Mauro  03:56

true. I started using and really have been into and it's very, very new, you know, is the AI the artificial intelligence and chat GPT especially for accountants, sure. And financial planners, where it's actually spooky to ask it things and it gives you answers that you have to read them. But it isn't like Google, you don't have to search it gives you answers. And I don't like to say it's just scary. Interesting.

Marc Killian  04:25

Yeah, very true. Yeah. Well in that regard, in that regard, then let's go to the next one, which is robo advisors, which kind of is using AI and predictive elements. So as an advisor yourself what's what's your take on the Robo?

Tony Mauro  04:38

Well, Robo since they're, you know, competitors, I gotta say, I don't like him. No, I think that they have a use. I've looked at them and you know, they do a pretty good job or a simple things, especially now I'm sure it'll it's gonna get better as time goes on and whatnot. And, you know, I don't think they'll ever rip Replace the human advisor. I think that most of the facts are good. But I think what the robo advisors aren't showing me yet is, you know, is this in tune with, you know, the most tax effective strategy? You know, how often can a person change a plan? It doesn't seem like there's a lot of flexibility, but they do have some appeals probably, especially to the younger people who are very used to just wanting all that they don't want human interaction, they just want to deal with somebody, you know, something quick.

Marc Killian  05:28

Yeah, quick and easy. And I'm with you, I think there's certain industries where I can see where people say, hey, if it's the computer, the computer is not going to try to take advantage of me, but it also is not going to be able to understand you, or, you know, relate with you as a human to a human. So there's, it's a double edged sword, right, dealing with humans does have its pros and cons. But it you know, when you find the right one, I think we all can probably agree that there's there's relationships where it's truly more beneficial, because you are working with another person. So

Tony Mauro  05:58

I think so. I mean, I think it's an emotional factor with human beings, at least with our clients. You can relate. Yeah, an emotional thing. Yeah,

Marc Killian  06:05

you know, what I'm going through, you've been there to your you know, your fellow breathing human. online calculators, Tony, super popular, you can online calculate just about anything and mortgage retirement accounts, all sorts of stuff. I don't know, kind of a useful tool, but do you want to take them to, you know, to super hard or what, I don't know, what do you think, you know, I

Tony Mauro  06:25

have a lot of them on our website. And I do like them for a quick hitters, you know, that people can go out now and calculate all kinds of things, whether it's a future value, like you're saying mortgage, amortization schedule, even some tougher things, you know, I mean, if you go out to like, calculator.net, they have got just a ton of free and I'm talking stuff, it can calculate your, you know, your body mass index, they got everything. And it is cool to play with, I think it's good for quick hitters, especially for talking in the financial area. And then I think you need to try to incorporate that with your advisor, and help implement it into your plan. But at least it gives you an idea of some things that were very difficult to calculate, you know, in previous years. And so I use them a lot, but I use them in the context of our overall financial plan. But it is nice to add it to show closure.

Marc Killian  07:18

Yeah, yeah. And again, something like that kind of thing can be a very useful tool to start kind of getting yourself quickly dialed in or walking into your advisor and saying, okay, hey, I did some quick online calculators with this, this and this. You know, here's what I'm seeing, you know, how do we break this down? What are you seeing? What do you think? And that way, when you're stress testing, various scenarios, you guys can kind of be on the same page. So great use, yeah. What do you think about platforms like Scottrade, or trade or any of that stuff that's out there. You know, it's certainly very appealing to the do it yourselfer, as well, and, you know, fidelity and so on and so forth. So, and clearly not going anywhere. What's your take on it as a as a CFP?

Tony Mauro  07:56

Well, I think some people look at him and say, Well, you know, these are, you know, there's I have no use for my advisor, you know, and whatnot, because I don't need you to trade what you really don't I mean, every product is available to you without an advisor. I think so the goods of them are they have all across the industry, even with us, it's brought costs to do things down. And I think that's good for the end user, the investor or the client. But I think though, that and they do, some of them offer a lot of information. Now, probably maybe information overload. But I think, you know, if you're going to use those kinds of things, you know, you just use those to execute trades. And you know, that kind of thing. I still think there you need a plan with an advisor or on your own. And, you know, work that plan. Those are just platforms to execute transactions in my in my opinion, we basically one of our financial planning packages is we do the plan. And if you don't want us to help you manage the assets on an ongoing basis, you paid us for the plan, but you can certainly go out and manage that part on your own not through a Scottrade e trade or something, and then just have check ins with us, you know, we're all fee based anyway. So it is it doesn't really matter where you hold the assets if you want them with us in advisory fee, you can but it's not necessary either. So I think they have their place even for working with guys like us.

Marc Killian  09:24

Yep, never very true. Right. And so there's so many things you can do there. And obviously, many clients want to build a plan. They want to build a strategy, Tony that's going to help them feel good sleep at night, have that peace of mind all those things, and have that good, strong financial plan together. But they still also want to dabble a little bit. They do kind of enjoy the you know, picking some stocks or doing some things and that's cool too. So having an account to do that is great. Just again, make sure you're working with your advisor on what those things are you're doing and make sure that it's speculative. Make sure it's something that you can sort of fund money if you will, and if you hate if you knock one out of the park, that's great, but if you Do something it's not going to derail the retirement. Right? Yep. Okay. Well, you know, podcasts, for example, can be added now to economic and business news. Certainly 24 hour news channels have been the thing for a long time. But think about that for a minute. Even just financial, economic and business news, Tony, 24 hours a day, multiple channels seven days a week. They have to and we know the nature of news anymore is they have to be creative. Right, where it's constantly they have to, they have to fill all this time with some sort of content. And that kind of gets sometimes a little sensate. Well, not a little they get a lot sensationalistic or whatever, because they just need to get eyeballs. So, you know, be careful. And it's certainly changed people's view on finance, right? Because think about it, you'll you'll turn on the news. And you'll say, you know, see the market, you know, suffered a, you know, a crashing day today. And it's down like 1%. Right. And it's like, really, is that really worth the crushing headline?

Tony Mauro  11:07

Yeah, I think this for us, as an advisor, at least for me, in my opinion, is kind of somewhat the bane of our existence. Because people do watch too much of it, I think. And it gets them all worked up. And if you let yourself get like that, the whole idea of all these things we're talking about is to try to make your life easier and simpler. And if you let yourself just believe all of everything you hear about verifying it, which I think that's where the adviser steps in and puts some, you know, some expectations and some truth to it, is you can let yourself go down weird rabbit holes. And then if you're actually following some of this advice, which I think these most of these people are journalists, they're there, like you said, to get eyeballs, they're not doing financial plans everyday, they may come off like they do. Yeah, but they really aren't. And so I always say take that with a grain of salt, double check, you know, what they're saying with your advisor? For sure.

Marc Killian  12:06

What do you think as a professional, what do you think about personal financial software like Quicken, for example,

Tony Mauro  12:11

I like Quicken, I really like personal financial software from the more from the accounting standpoint of knowing where you're at with your personal finances at every step of every month, just like everything else. And all the software it's gotten very, very good. It can pull bank feeds in it's not cumbersome. Like it used to be. But I think a lot of people get confused with it. Stop using it because they sometimes can't figure it out. And they just throw up their hands and say, I don't like it now Quicken again, I have a love hate relationship with their, their company, which is into it. I mean, into it's been around, I do like into it. But I think sometimes they try to make it again, all encompassing, kind of like the trading platforms where they're trying to steer you along your financial way. It basically by answering some yes, no questions. And I think there's a lot more to it than

Marc Killian  13:01

that. Even good software companies, the new business model of constantly updating or subscription based, that stuff can can certainly get annoying. Definitely. But yeah, it's it can be a love hate thing. But I think overall, it can be a useful tool.

Tony Mauro  13:16

I think it'd be a very useful tool. Absolutely. I would recommend anybody using Quicken mints, whatever else they can find that they like, keep track of their personal monthly finances, ya

Marc Killian  13:26

know? And yeah,

Tony Mauro  13:27

I think, you know, the, the downsides are minimal. You know, the other thing I don't like is, we were talking about it on the last episode, because we didn't touch on this is, you know, the data mining that these companies do with us, they get us all in there. And they know everything about us. And they can, you know, mine our data and market us, but that's part of it. I think you're better off with personal finance software than without, okay. Well,

Marc Killian  13:50

and we'll finish with kind of staying in that sort of space. Right? So that's personal software, maybe you've downloaded or maybe it's you know, now nowadays, it's definitely just, you know, over over the web, mobile banking apps, right. I mean, just, you know, 10 years ago, seven years ago, you know, maybe half the people I knew felt confident or comfortable using the, the mobile banking app right from their phone. Now, it's virtually everybody. It's just, it's just faster and

Tony Mauro  14:13

easier, faster and easier. And you can really pretty much do everything on the mobile app, now that you could inside a bank, you can even now take pictures of cheque you get and mobile deposits. It's up to a certain amount, I think, at least with my bank, but you really don't need to visit the bank, but the bank is still there. And you've got that mobile app, check. Check balances paid bills, right from your phone, again, with the idea of trying to make your life easier this this whole thing is if you use all this tech properly, you can really simplify your life but you can also go down and it just you feel overwhelmed. So I think you need to get with your advisor. We help clients with their tech. We're trying to make their life as easy as possible and they basically can run their life we always tell them we want you to run your life from your phone. And no matter what age you are, you want to be confident to do it. We want to help

Marc Killian  15:04

them do that. Yeah, for sure. And finally, Tony, if you're talking about digital space and doing some of these things, what do you think about the digital estate planning services, you know, online wills trust or Legal Zoom? Like, I don't know, you know, I kept feeling back and forth with some of this stuff. It's this kind of world where it's quick and easy. And maybe if it's really basic, maybe that's okay. But, you know, it's still worthwhile to see a professional, if you need something a little more complicated.

Tony Mauro  15:30

I definitely agree with that. 100%, I try to steer people away from that, let's say just need something very, very basic. The attorney is, in my mind, I know they get a bad rap, we always, always make fun of them. But I think that they are essential in you know, wills, trusts, things like that by cells, whatever, to make sure all your bases are covered. Now, I just had my own will updated, you know, and I went to my attorney, you know, and they're talking to me, just like I talked to clients about stuff that I, you know, kind of brushed over and I don't know, if I would have got it online, maybe I would have maybe I wouldn't have but you know, my financial power of attorney, my advanced directives, you know, my medical power of attorney, all that stuff, that I you know, unless you're answering the boxes in the questions, right, and online, you may not have that, and you may not even know it. So again, having a real life, bro, it's a human, I think is better off in that area. 100%

Marc Killian  16:32

Yeah, yeah. And again, there's so many facets to this stuff nowadays, it's certainly changing everything in the world. So you know, just kind of wrapping it up. It's, it's just something to be cognizant of, it's, we have to think about, think about COVID. And people having to go to zoom for so many things, and especially even seeing their financial professional or whatever. And we had to do things online. And in the first couple of months, talking with advisors, people, you know, clients were very leery to have to use the portal and then be sharing and talking online, right on Zoom, if you will. And then as time went by now, people actually prefer it, because now they're like, I it's time for my annual review. I don't need to come into the office, right, we can just do this over zoom, you know. So we

Tony Mauro  17:12

do it really literally today is our day in and this is mostly seniors, and this deals with tax clients. But we have a day where the seniors who just can't get on the portal because we normally have our tax clients e sign, you know, they look at their tax return and there's a page they sign it's it's legal for us at the IRS says that that serves as their signature, but some just can't, can't do it. And so we have a day where they come in and they make an appointment, and they come in just to sign which again, I think is a waste of time, but their time that is right, right. But it's not everybody's gonna be able to adapt to the technology. But I you know, we have many, many seniors that I It surprises me

Marc Killian  17:54

that they're okay with not driving, and they're like, yeah, we'll just do it online.

Tony Mauro  17:58

They do it online. Yeah. I mean, they more and more of them, you know, are adapting to this, which tells me that they haven't thrown up their hands yet and says, I don't want to learn anything, because the world's forcing them to do it came true,

Marc Killian  18:10

very true. My mom's 82 And she's pretty good with a lot of stuff, a lot of digital and online stuff. So which I didn't see coming, you know, so kudos to, to her. But you know, I think yeah, sometimes though, you know, some people just like, hey, I still want to, I still want to look somebody in the eye and shake a hand. So, and there's nothing wrong with that, either. Oh,

Tony Mauro  18:31

nothing wrong with that.

Marc Killian  18:32

There you go. All right. Well, how was technology redefining retirement planning? It is there's no way around it. It's changing it a lot has been and of course, you know, we have to adapt or get left behind. But I think there's still a way to have a happy medium. And of course, if you need some help, you know, kind of finding that balance. I mean, a retirement plan is about balance. So also in the way you're using tech to work with your retirement plan. It could be about balance. Tony and his team are here to help you're planning proz.com That's your planning proz.com. He's got 30 plus years of experience helping folks get to and through retirement. As I said earlier, he's a CPA, a CFP and an EA. So a great resource for you to tap into. So give him a call. Get on the calendar, stop by whatever you need to do if you need some help. And don't forget to subscribe to us on Apple, Google, Spotify. Guess what YouTube now instead of just Google, they've merged everything over to there but either way, find us on whatever podcasting app you like by simply searching it out playing with the tax man or visiting in his website. You're planning proz.com Tony, my friend, have yourself a great week. Aren't you the same. We'll see on the next episode. We'll see you in April. Hopefully you won't be too too swamped with tax season, but we'll catch you next time here on plant with the Texas.

Announcer 1  19:47

Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated insurance Agency investment strategies discussed in this episode may not be suitable for all investors please consult with a financial professional

As much as any other threat, recognizing and avoiding scams has become a necessary skill for today’s retirees to develop. Join us as we explore crucial steps you can take to safeguard your financial well-being against the growing tide of scams and identity theft. Learn from real-life stories and gain practical advice to keep your finances secure in this digital era, all from the perspective of a seasoned financial professional.

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

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Transcript: 

Marc Killian  00:01

As much as any other threat recognizing and avoiding scams has become a necessary skill for today's retirees to develop. Join us this week on plan with the tax man as we explore some crucial steps to hopefully safeguard your financial well being against the growing tide of scams and identity theft. Look up in the sky. It's a bird.

Announcer 2  00:21

It's a plane. No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:36

Hey, everybody, welcome into the podcast. It's playing with a tax man with Tony Morrow and myself here to talk about your financial fortress, practical strategies for retirees against scams and fraud. And for this month of March, I think Tony and I are going to kind of stay with tech as our theme. We're going to talk about some scams and stuff. This week, we're going to talk about some other technological, you know, retirement planning things on our next episode. So we're gonna kind of use that as our theme this month in March. What's going on my friend, how are you?

Tony Mauro  01:03

I'm doing well. How

Marc Killian  01:04

about you hanging in there? You and I were talking offline, as we got started that it's just you know, it's March already. And

Tony Mauro  01:10

we're busy, busy, busy, busy. And I thought these two topics that we're going to talk about in these next couple episodes be? Yeah, like I said, very, very timely, it's tax season. There's

Marc Killian  01:19

all kinds of things going on. Yes, sir. You're hear a lot from clients. So yeah, looking forward to sending information back and forth doing this, you know, the scammers they love to come out in force at different times of the year, certainly around Christmas, right. That's a good one springtime tax time, right? They tend to kind of come out there, oh, you, you know you, your tax bill is this or, you know, you owe this and use your tax, you know, return to pay for it, all these kinds of things. Right? always something going on. So let's jump in and talk about a few things. And, you know, I got this first a little news example here, Tony, that I wanted you to kind of listen to this and check this out. And then tell me things that you've seen similarly or heard, you know, within your own practice, right. So there was this news example, little synopsis here is the lady named Marjorie 77 years old, lost $660,000 to a Tech Support Scam, where the fraudsters posed as bank officials and somehow convinced her to wire her funds into crypto to protect her money from suppose a theft. Well, of course, they stole their money. Americans over 60 lost $3 billion last year in cyber fraud crazy, absolutely

Tony Mauro  02:30

crazy. It really is. And I think to elaborate on it, you know, most of the time the seniors tend to be the bigger targets but it can happen to anybody. And with all this tech going on and really sitting behind computers and phones all day it comes at us and you know we were just talking about how busy we are and sometimes you you're busy and you're not paying attention and you just go with it and then some potentially could happen the worst case I've seen in our own practice is we had a an elderly lady several years back just that she just uh you know, annual tax climb but she came in and she had said that she had gotten calls from somebody saying that they needed money they were pretending to be somebody she knew and they wanted paid in some kind of visa gift cards. Yeah, she kept going Yeah, going to Walgreens and getting visa gift cards anyway, at the end of it all before she found this out she was out about $11,000 and this poor lady you know, didn't have much to begin with and just a sad case and that is what is going on leading to these huge numbers is stuff like that people are getting our clients are getting robo calls and scam calls from people pretending to be the IRS and the IRS comes out and says they never will call you exactly always a letter Yep. And you know don't fall for it but people people do sir you know and it's it's all over I just had a call actually wasn't a call was an email yesterday directly to me saying that the person's name and says I need access to my portal please help. I looked her up on our system. She's not even a client of ours. I you know, that's a scam email coming in? Oh, wow. directly to me. Yeah, as a business not just individuals, but businesses to businesses, we you know, we clients don't realize it, but how much we spend dollar wise, and, and also timewise and trying to protect their data, because it's all out on portals. Now, you know, all this tax data, we got to be very careful with and it's difficult. But I think from a large, big picture view, you've really got to pay attention to what you're reading. And we'll get to some some more examples here in a second, but it's terrible. And I think it's only gonna get worse because we are getting into a society where we're not even using real money a lot of times anymore, you know, it's all it's all transfers and EFTPS and credit cards.

Marc Killian  04:53

Yeah, exactly. And that we're gonna Yeah, that's a great point because like with your credit card, or excuse me your gift card comment where Gotta run through some of this stuff, right? So let's go, let's kind of break some of these things down for folks and give some examples. We'll put a link into the show notes as well, that gives kind of more examples of some of the things from Thompson's routers, article from Thomson Reuters on there, that might give a few more ideas for people to look through as well. But, you know, so there's, we've, a lot of us have heard of phishing, right? We know about phishing emails. So there's phishing vishing. So that's phishing with a V. And smishing. This is hilarious how we make up these words, right? Yeah. But anyway, so let's, let's run through those three real fast. So phishing, of course, we just mentioned, you just talked about it yourself, emails and websites trying to steal your data. That's one, right. So be Be diligent there, I think we've gotten a lot better about those. But, you know, again, keep your head on the swivel, exactly,

Tony Mauro  05:44

because I mean, emails are coming at us so fast, that again, a lot of times, we're not reading them, and we're just flying through them very easily to be deceived, I would definitely check out you know, the headers of your email, make sure it's coming from somewhere you kind of recognize that's, that's the big one. And even

Marc Killian  06:02

with that, Tony, I would say be still be very careful, right? Because we're seeing these kinds of scams. We've talked about this a little while back, where, you know, you get an email from Amazon, for example, since it's so massive, and everyone uses it and says, there's a problem with your order, click here to sort it out, or we'll help you get it taken care of, don't do that. I don't care if it you know, if it says Amazon, and it looks like their logo and everything looks fantastic. Immediately just delete the email, and then log in to your personal web, you know, Amazon account, go on the web, whatever, you know, you go there versus a link, they provided you to go there, right. And that way, you're going directly to the horse's mouth to see if there's an issue nine times out of 10, there isn't one, it's just someone trying to scam you. So definitely be careful there. What's vishing, Tony, or

Tony Mauro  06:48

visiting is if you actually get a call. And a lot of times these will come in through your cell phone, because everybody's using the cell phones, and they're trying to trick you into providing personal information. And they're very good at it, you know, and most of the time, I mean, the easiest way to do this is, if you don't recognize him, I would probably just hang up, it would be my best advice. If it's somebody you know, or somebody that really needed your personal information, they're either going to call back, or they're going to get it some other way. But this is where I think my dad's got a lot of these calls. He's a senior, he gets them at home a lot on his landline. And they're asking him for his information. They're pretending to be either a credit card company, or somebody soliciting and they're asking him for his course, they know his name, but they want his address. Sometimes they'll ask for credit card information. Some of them have even asked him for his social security number. Yeah. Obviously, you do not want to give that stuff out. No bank information, do not give that out nothing. And

Marc Killian  07:42

they try some of that stuff to this is the IRS calling or that kind of stuff, right? And it's just that's not the case, right? They're gonna send you certain certified letters, they're gonna send you appropriate things of that nature. So smishing is also cell phones. This is just through text. And that's obviously the big one now too, right? Because it's like, again, it could even be the Amazon thing. There's a text from Amazon saying, there's a problem with your order, click this link to sort it out. You know, yeah,

Tony Mauro  08:07

I just, I just had one of these yesterday, I pulled it up on my phone to for this call. It was from a person, I get a text that says, Hi, my dear friend, it's been a long time since I've heard from you. Have you been? I have no idea who this this number is. So I texted them back said who is this? And she said, It's Diana. And you saved my number. And I said, I think you have the wrong number. And then she started asking me questions about my personal information. And that's like, why do you need this? I was playing with her a little bit, and finally got her to just stop. But I think she was fishing for some personal information from me pretending to be an old friend. And oh, yeah. And that that's just a little bit too fishy, you know? Exactly.

Marc Killian  08:49

No pun intended, right? Yeah.

Tony Mauro  08:51

It's just so you gotta watch it because they will, you know, they will. I've seen clients bring stuff in with text, pretending to be credit card companies. Again, your your card has been declined at least call or at least provide information. Things like that. Haven't seen too many from the IRS, the IRS scammers usually call or send emails, but it's probably possible that they could start data again, the IRS doesn't text at all, they're very old fashioned with their communication. So you know, be be careful with that, too. So there's three three areas you got to be careful of. Yeah, exactly. They are just crazy. And what's at stake, right, Tony is obviously identity theft, financial loss, credit damage, motional stress, right?

Marc Killian  09:31

So the obvious kinds of things. So let's provide a couple of examples here. And I said, um, as I mentioned, we'll put the link in here to the Thomson readers that give some more details on each of these. But let's run through kind of a few bullet points of the styles of scams that are going around government imposters big one right? Because people get immediately scared Oh crap, I gotta take care of this. It's the government you know, and often that's what they're they're preying on that and praying for you to also be like, just scared and immediately do Whatever, because you don't want to, you know, have some sort of government problem. Yeah, we

Tony Mauro  10:03

haven't we have a commercial here, for example, from the Polk County Sheriff, saying that, you know, we will don't fall victim to scams that somebody calls you from the sheriff's office demanding money or you're going to jail, you know, that, that kind of thing. So they're, you know, they're, what do you want to call it? In an authority figure? Yeah. And that scares people, just like the government. And so they actually are taking their time and money to run commercials, because it's going on around here right now that people are getting scammed like that. And police would be another one,

Marc Killian  10:35

I would say, yeah, right. We've seen those kinds of things to where if you don't pay this amount, sheriff's department's on his way out to lock your house to lock you out, you know, for some sort of, and that's like, that's all crap, right? Don't fall for that stuff. They do not do that you're going to certainly be properly notified through certified mail. You know, so don't fall for that governmental imposed imposters, sweepstakes. I don't know if I see these as much anymore. But certainly like, hey, you've won something kind of thing.

Tony Mauro  10:59

I haven't seen a lot of people complaining about this. But you could see how this would work. I mean, you know, somebody calls says you want something and oh, by the way, give us all your information and your credit card to collect the prize or something you've already won, which should send up red flags right away. But again, people especially maybe the you know, the elderly, or people that are alone, a little little more craving for some contact, and conversation. So gotta be careful there as well.

Marc Killian  11:25

Yeah. Computer Robo scams, you talked about that robo calls and phone scams, the robo calls. So this big one here, folks is and Tony, like, I know, you know this as well make sure that you don't say yes, you know, when you get these phone calls, where they're like, Hi, this is such and such, you know, blah, blah, blah, I'm having trouble hearing you. Can you hear me? And you go? Yes. And they record that? Yes. And now they plug that in to whatever automated thing where would you like to buy, you know, $5,000 worth of whatever. And they plug in your little voice saying yes. And therefore you're kind of screwed. So don't say yes, just say, I can hear you. Right or something like that.

Tony Mauro  12:02

That's right. I, my brother, again, I've got so many examples of this. But it's a robo call kind of phone scam, where the scammers are recording people's voices. And then they're using AI to create that voice in a conversation. And my brother had an insured who called him up, because he's trying to get basically wanting to know if there's any insurance coverage for this. But the client received a call that he swore was his son, it was his exact voice and everything saying he had been picked up, he was in jail, and he needed him to wire him $5,000. And the other guy did it. And it was a scam. And the guy was trying to see if he could get some insurance coverage. But insurance company said no way. Yeah. But this guy, I mean, he's not elderly. He swore it was his son. Now, he left a voicemail. And then you know, the father panicked a little bit saying, Well, I can't call him he's in jail. I'm going to I'm going to wire this money right now. And he did. So that's a that's an extreme example, but it does happen. And with his AI, if they hear me talk a little bit, they probably can somehow, you know, clone my voice and make make words up for

Marc Killian  13:15

1. Exactly. And that's kind of similar Tony to the grandparent scam, which is on my list. fairly similar. It's a loved one scam of some form, right? Where, to your point, you know, you get this message or an email saying, Hey, grandma, grandpa, it's, you know, Suzy, and they've got the information. And you know, I got in an accident, and I've got to pay $3,000 to for bail or you know, whatever. Right? Yeah. And people will jump to that. So don't do that. Don't worry about definitely don't go down that route. The computer tech support scams. We just talked about that for Lady Marjorie, who fell victim to that. Be very careful with tech support of any kind, they are hoping that seniors will be like, I don't understand this thing. So let me get some help. And again, don't go through any links or information that you've gotten via email or text. If you really are having a tech issue with your computer or a specific app or software. Go directly to that company for tech support. Don't go through a link that some you know that you especially unsolicited link, right. Unsolicited links. Yeah, yeah. Okay. To your point about the grandparent scam, I'll actually or to you, excuse me, you're talking about that person that was messaging you and acting like they knew you. That's a new one to a romance scam.

Tony Mauro  14:28

Yeah, this very well. Could have been that, you know, I don't know, I didn't get that far with it. But yeah, you really don't know. You know, maybe they're trying to scam you. And again, with the ability of you think about it on the phones with a romance scam. What I'm thinking of is somebody send you maybe a provocative pic of whatever, and people are gonna say, Oh, well, you know, what's that? Let's take a look. And then all of a sudden you're in a conversation with somebody you don't even know. And you know, then all of a sudden you've given out some information you should know

Marc Killian  14:56

while they're playing. They're playing on the fact that they're hoping that you're lonely especially Yeah, because they can find out if you're widowed or something like that, right? Yeah, single person. So So those are some examples. And we'll give a few more things telling you this so we won't get too too long in the episode. Let's go through kind of rapid fire or some ways to better recognize the signs of the scam. I'll start with a simple one age old thing that grandma taught us a long time ago, if it's too good to be true, probably is.

Tony Mauro  15:21

Yeah. And I think another one I mean, I'll rapid fire the next one. You know, if you if you get links, and you start reading an email, you need to look at the link. I definitely wouldn't open attachments. That's a rule in business for us for sure. Eating on a personal pewter. That's how all this stuff creeps in.

Marc Killian  15:39

Yep. So be very careful about that. Does it look suspicious? Yeah, exactly. Is it we mentioned it a second ago. Is it unsolicited? You know, is you're getting some random thing, asking you for personal information or to solidify something that you may or may not have done, and you don't recall it. If you've sent solicited, then that's a good sign. Yeah.

Tony Mauro  15:59

I think another one with that is if you get an email, and it's the paragraphs don't make a lot of sense. Or wording. Oh, spelling error? Things like that. Yeah, definitely. Then look up top seat, you know, I

Marc Killian  16:13

mean, who does that that's a great point. Another one. A lot of scams originate from overseas in different countries. And so therefore, their wording or their their English translation may not give me that click right. Right. Something looks off, you're thinking? Well, it to your point earlier about the pictures or something like that, you're thinking, well, this person looks, you know, or says they're from Florida, for example, right. But yet the wording in the language tells you that maybe they're not, you know, or something like that. So that's great point, actually, are they requesting a small amount of money in order for you to get a bigger amount of money? This one? I think most people are wise to this, Tony, it makes me think about the one from since of anyone around the 90s. Right that that prints in Nigeria that will give you $40 million? If you you know, that was so old, but there's still things going like that going around.

Tony Mauro  16:59

They must on that. I don't see that very often anymore. But every once in a while I will. It's a must. Somebody must be doing that still. Exactly. Yeah. What else you got? Well, you know, one is, like I said before, you know, most legitimate companies aren't going to have you pay them in gift cards. Yeah. And so be very careful of that. Because just like my little story with my little tax client, I mean, that's almost for sure. A scam? Yeah. Just just don't do that.

Marc Killian  17:28

Yep. Okay, so let's, let's beyond like spotting those red flags. Let's talk about some protections, we'll wrap it up with some protections here to avoid being a scam victim. Obviously, in today's day and age, we're all sick to death of passwords. I get it. But it is the world we live in. So create some strong, unique passwords. And for God's sakes, folks, if it's financially related, please change them regularly.

Tony Mauro  17:51

Absolutely. I always encourage clients to get a password keeper that randomly generates passwords have different passwords for every site. Because if you have the keeper, you don't need to know that you just need to know your master. And, you know, I so many clients have the same password for every single site. We've all heard it. And then like you I hate them, too. I hate multifactor authentication, but it's the world we live in. And it'll certainly protect you a lot better than having, you know, your first and last name as your password. I mean, yeah, it doesn't take very long for hackers to break the hip stuff. Exactly.

Marc Killian  18:26

And I get it. We all hate it at this point. But you got to do it, man, especially when it comes to your financial stuff, monitor your bank statements and credit card transactions regularly, folks, we can probably tie these two here together, Tony, turn on those fraud alerts, right with your credit cards. I mean, every time I make a transaction, it's annoying to get that extra message. But so what you know, hey, you charge $47 Well, if I know that I did it, then I ignore the email. But if I say I charge $47 And I don't recall doing it, it allows me to think well let me go dig into this.

Tony Mauro  18:58

Yeah, I think if you don't have that on your credit cards with the tech that they have, and we'll offer you with that, that's just plain silly. And then I think we always tell our clients even personal clients, you need to be reconciling your bank statement and credit cards every month now many don't do it and that's when you're going to miss something that may be slipped through on that bank statement and you didn't know about because all you're doing is you know living off of the last ATM slip you got right you had this much money in your bank account. Yep. And that's how things go unnoticed in small amounts because the good the good ones with bank accounts they'll slip stuff in very small odd amounts so to hopefully go unnoticed yeah, great point Tony. Great point they're not big big dollar amounts and then next thing you know you've got 15 charges say from like a Google yeah of $12.50 over five months you know and that's how they do it and then once you catch on they

Marc Killian  19:52

move to the next Yeah, for sure. I just got one myself from from there's a I know there's a gaming service. I know it's a legitimate service. called Twitch, but I've never used it and there's no teenagers in my house. And all of a sudden, I had three random twitch $7 Not a big deal, you know, but I'm like, well, that's not I didn't do that. So of course, I immediately talked to the credit card company, and they got it reversed. So somebody gets your information. And yeah, to your point, they're hoping you will just be like, Oh, $7 Oh, I don't remember what that was and move on. And then it's, it's a reoccurring monthly charge? Well, you got three of them now 21 bucks a month, every month? Hey, you know, that adds up. So and if they're doing that to 100 people, well, they're making bank. So you got let me ask you is as a tax professional and a financial professional, Tony, what do you think about, you know, retirees, pre retirees, or really anybody freezing their credit, especially like, if you're set as a retiree or a pre retiree, if you're over 50, there's a good chance that you're not planning on opening any new lines of credit soon? If that's the case, is it worthwhile to freeze your credit,

Tony Mauro  20:52

I think depending on your situation, and the amount of money you have, I think it's, it's worth looking at, absolutely, because you're not gonna always unfreeze it, and you don't have any need to run out and get credit. And it's just gonna make make it that much harder for somebody to really get one over on you or, you know, get credit cards out there, it is a little bit more work to then go get some credit to unfreeze it. But again, you're not in any any real rush. So

Marc Killian  21:20

I think they've made this technology better, too, right? I think you can go on to your, to these credit rating places and just put a hole, put a freeze on it. And that basically just means nothing new can be opened under your name until you unfreeze it. And I don't think the steps are all that complicated now. So no, not like they used to be Oh, yeah. For sure. You know, just a couple little really extra steps logging in and, and Firefox and freezing it. Yeah. Yeah. So it could be worthwhile. It's a great way to protect yourself. So last piece, we'll wrap it up. I know, we're getting a little long here, folks, but just some digital housekeeping real quick. Keep your anti virus software up to date. That's a good one. What else? Tony?

Tony Mauro  21:57

I'd avoid using public Wi Fi, you know, especially definitely don't use it. And access to any type of bank info or any personal data. Yeah, you're gonna do that good point. Like, you probably

Marc Killian  22:07

have a public Wi Fi there at the office, you know, many doctors offices, lawyers, offices, so on and so forth. Right? They offer public Wi Fi while you're waiting, especially doctor's offices, right? Because you're there hours or whatever. And you want to jump on your phone and do something, well, fine. If you're using that. But keep that real basic. If you're jumping on to check your Twitter or something fine. Maybe right. But certainly don't go check. Don't go checking your bank, don't go into your banking app while you're on unsecured public Wi Fi. That's a that's a no, no, let's not do that. No, no. And then finally, you know, you talked about passcodes. And then we talked about passwords, well, make sure that you've got something on your phone that way too, right. Don't use your address as your passcode. You know, some people like to use their fingerprint, and that's fine, you know, or that design thing where you got to draw some weird pattern to unlock your phone, but just consider having secure your phone lock it up to

Tony Mauro  22:59

Yeah, even even now with the iPhone. The face ID is better than just know nothing at all. Yeah, the

Marc Killian  23:06

things would still weirds me out, though, right? I don't know how I feel about that. It's like,

Tony Mauro  23:12

I don't trust it.

Marc Killian  23:12

I don't need it. And then you got my face too. But of course, I guess at this point, everybody's posted pictures of themselves on Facebook at some points or faces or everywhere anyway. Yeah, interesting stuff. But you know, there's that two factor stuff, too, right. A lot of companies now are almost forcing you to do that. Yeah. So we make them for our payroll clients, you know, to get into their portals, we

Tony Mauro  23:32

have the two factor authentication. Yeah, for every every payroll, clients, employees, you know, and some employees really don't like it, but we tell them we're not shutting it off. Because if somebody gets in and changes your bank account information, you know, then that's going to be bad for you. And so it's for your own protection. So,

Marc Killian  23:51

definitely, well, you know, final summary folks, you know, there's a lot of scams out there. If you do think you're a victim immediately start calling the companies you need to talk to if you're working with a financial professional like Tony, for example, reach out to them and let them know so they can immediately take steps if you feel like your information has been compromised, of whatever level and of course if it's egregious enough for your concern, call the police. Whatever the case is, but take steps to protect yourself so Hopefully, this helps you out a little bit here on this episode, the financial fortress and Tony anything else where we go Oh, that's

Tony Mauro  24:22

it looking forward to next meeting.

Marc Killian  24:25

Yeah, yeah, I mean, we're gonna keep continue on with the tech stuff here again, because it is that time of year, tax season is upon us and the scammers do come out and for So protect yourself out there, folks. And if you need some help reach out with Tony and his team at your planning proz.com You're planning proz.com Don't forget to subscribe to us on Apple, Google Spotify, and we'll see you next time here on plan with the taxman.

Walter Storholt  24:52

Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered Are through a VAT tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors please consult with a financial professional

Every generation likes to talk about how much harder things used to be when they were kids. Like all of the people who used to have to walk five miles to school, in the snow, uphill both ways. But they had at least

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Transcript: 

Marc Killian  00:00

On the prior podcast we talked about every generation likes to talk about how things were harder for them than it is now. And we're gonna continue our conversation with retirement planning. Is it harder than it used to be? Here on this episode of planet tax man with Tony Morrow? Look up in the sky? It's a bird.

Announcer 2  00:19

It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Hey,

Marc Killian  00:33

folks, Welcome to part two here have a conversation on is retirement planning harder today than it used to be? And I think in a lot of ways, we've certainly in the first half, we've ascertained that Yeah, it definitely is. But there's also some things that do make it easier. And I'm sure that's going to continue to be the theme throughout this episode, as well. But we certainly appreciate you and welcoming you into the podcast. And if you did not check out the prior one, feel free to do so you don't have to listen to one day to enjoy the other. But it's certainly not a bad idea. And of course, you can do so by simply subscribing to the podcast playing with the tax ban on Apple or Spotify or Google whatever platform you like to use a simply just stop by Tony's website to find those links and to take yourself right there and check out the tools tips and resources at your planning proz.com. That's your planning proz.com. Of course, you can always just type playing with the tax man in the search box of whatever app you like using as well. Funny, my friend what's going on, buddy? How are you this week?

Tony Mauro  01:30

I'm doing good, you know, in the throes of tax season and dealing with a lot of that, you know, but so far, it's been rough, smooth filing? Yeah,

Marc Killian  01:39

yeah, for sure. And it's late February. So did you were you good? Did you to take care of things for Valentine's Day, get your wife something nice or give her some flowers or anything?

Tony Mauro  01:49

We did do that. And we went out to eat this year, which was a little bit of a change. And so we enjoyed it. Yeah, it was but pretty pretty laid back and casual. Yeah,

Marc Killian  01:57

for sure. Well, I hope everybody had a good holiday or good Valentine's Day. I don't know if it's, I guess it's a holiday at this point. But but let's get into our conversation here on the next five of our conversation around, you know, is retirement planning harder. So let's go with number six here, healthcare costs, man, this has to be a no brainer, it's clearly back then it had to be a lot easier. Now we're facing massive escalating costs here. But we do have better technology for longer life, which is going to tie into another one here in a little bit. But, you know, again, it's all kind of this weird, double edged sword, we have way more tech and way more stuff. That's good, you know, for our healthcare side, but it is not cheap.

Tony Mauro  02:36

It's not cheap. You know, and I forgot to mention this on the last episode, but I thought about it after we had gotten off. But now that we're talking about, you know, we're in our 50s is, do you ever stop and think about? Boy, I'm so glad I'm not, you know, young and just starting out anymore, you know, because you always feel like after they got it, they're gonna have it really hard. And I wonder if our parents thought that two way back in their day, but we we survive, you know, and we adapt. But yeah, I think today, with the health care costs, I've just had a meeting with my benefits guy for our group health. And, of course, costs are going up again, they always do. He always acts like he's scared to tell me and I already know, you know, costs are going up. And I think it's, you know, a byproduct of, you know, we're living longer. We've got all this technology. And it does allow us probably, if it's not abused to live a healthier life. But yeah, the costs are just astronomical. And I think, as opposed to our parents who weren't living that long, and there wasn't, it always seems like there's a lot of different weird elements. I'm going to talk about cancer and things like that, that nobody seemed to have back 50 years ago. But nevertheless, I think that healthcare becomes a big issue in financial planning, especially as you're nearing retirement, once you get into it. You've got the whole Medicare thing, supplements and making sure you're covered. And it's a big cost for a lot of these retirees. So I think it's harder today than it was a long time ago. Yes. Yeah. And

Marc Killian  04:09

then think about some of the issues with facilities, right. So you know, facilities. On the one hand, we have nicer better facilities now, especially for seniors, right, or, or for folks with advanced seniors than we did you know, in the 80s or so. But, again, it also cost a ton like these continuing, whether they call them continuous care communities. I mean, these things are pricey, right? So if you're not talking about it, which many people like to avoid the conversation of, of aging and needing some sort of long term care, then you really put yourself even more behind the eight ball when the event happens. And now where you where you get the money from right now you're at a time to even plan or strategize. So, gotta talk about it right got to figure out what to do, because it is affecting more of us because of number eight, which we'll get to in just a second is that the longer you know, the life expectancy, but before we get there, let's talk about number seven. which is the sandwich generation, which many of us are, I was in this mode for a little while, I had my senior, my elderly mother living with us, and our daughter was still home, you know, before she went off to college, you know, now both have moved on to, you know, daughters in the Navy, and mom's got herself in a senior apartment complex, kind of, like we just talked about. But you know, that's tough, right. And especially right now, in this environment, we're in financially here in 2024, Tony, you know, I mean, everything is costly, you know, so if you're trying to take care of three generations in the same house, boy, that's rough, it

Tony Mauro  05:33

is rough, and it ties into what we just talked about with health care. And then what we're next going to talk about, with people living too long is, and I see it every day, and I you know, luckily for me, and my dad is still alive, and he's going to be 83. But II, we have planned for him. And he knows that. And it his biggest fear is, you know, obviously, they don't want to go into a full fledged nursing home. And they want to be able to live on their own as long as they can. But luckily, you know, for him, it's got the planning that was done and the means to do it. But I think a lot of people, I would just had somebody in here yesterday as well, he's in his 50s. And he is mom and dad didn't plan, they have dementia, he doesn't know what to do with them, it's really taken an emotional strain on him to try to take care of his aging parents, they're in their late 80s. And, you know, he doesn't know what to do with it. And not only consumes a lot of money, but a lot of emotional stress as well, if you will. So I think it's very, very challenging today. And many, many are going through it. I mean, I talk with friends my age, and they're, you know, they're, they're either their parents are aging, you know, or they need full time care. And it's, I only think it's probably going to get maybe a little worse, but because I don't think people are planning enough, like we were talking about the last topic for that, that eventual need of, you know, long longer term type of care.

Marc Killian  07:06

Well, and think about, you know, obviously, you've got the cost of aging care, right, so advanced age here, and you've got the cost of college, right, and then you get the cost of all these things out of control. So you end up with your college age kids at home, your parents, you know, elderly parents at home with you, as well. And it's just, you know, and then the grocery bills up through the roof now, because you got all these people there, and you know, groceries are out of control, you know, things have got to shift, and I'm not sure how we're going to make some of these changes from from our leadership standpoint, they just, they just seem to be, you know, comfortable with, again, kicking the can down the road, we'll we'll just make minor adjustments to my bring temporary ease, but it just makes for harder problems later on. So it's very tough, right? I mean, you're gonna have to have a, you've got to think your way through some of this stuff, instead of just kind of reacting in the moment. And I think that's certainly something that all of us have got to do in different walks of life. And you find yourself thinking, hey, look, I didn't get all the way to this point to have to keep making these hard decisions. I'm, you know, I'm getting close to retirement, I just want to relax. And it's like, well, that's how you get there to relax as you gotta make some of the hard decisions along the way. And certainly long term carriers and things of that nature are one of those. So good points, for sure. So life expectancies, well, we were living shorter, right, my dad passed away at 63. Back in the early 90s. You know, and so, you know, most of the men in my family have passed away early, but it doesn't mean that I'm going to so I've got to plan on being around longer, because we do have all these medical advances that we talked about a minute ago.

Tony Mauro  08:41

Yeah, we do, you know, and would our parents were alive. I mean, I still have one parent alive. And you know, he's 83. And, but earlier generations, you know, they didn't need as much because they weren't living as long. So the retirement didn't have to last. Now, when we plan with, with our clients, we're planning out to 90 for sure. And then if they've got some longevity in in the family, even a little longer, believe it or not, and then if it doesn't, is not needed, that it's not needed. But with that, and the fact that medically in some of the technology that we've already talked about, are keeping people alive longer, that are going to need their funds for a longer period of time versus 5060 years ago, generally. And so it all comes back to like you were talking about is is getting the proper plan and making sure that, you know, this plan is going to work for you, which all this stuff, people look at advisors saying, well, all you're doing is just picking investment. No, it's It's this kind of stuff that's more important than what you actually have your particular portfolio in, per se, you know, and so this is kind of stuff that I don't think you can overlook, and that's

Marc Killian  09:49

one of them. Yeah, definitely. You know, and so you think about the, you know, the aging process, right? So we, we tend to kind of do that thing and say, Well, you know, I don't have longevity so You know, just like I was referring to myself, I don't have longevity. So I'm not going to worry about it and think about what's happening to the younger generation right now. They see all these things, we're constantly being hit with this information and stuff saying, Yeah, you know, we're going, the world's going to collapse and blah, blah, blah, and you're not going to be 20 years from now, and so on and so forth. And so you've got younger people. And when I say younger, I mean, into the 30s, you know, doing this whole YOLO thing, right. And I know, it's a little bit of a dated term, but you know, you only live once, kind of deal and they're, they're kind of, they're not thinking about the future in we have to still do that. Because it seems like every time we turn around, Tony, there's always something where, oh, it's, we're not going to make it another 40 years, or this, that the other and then 40 years goes by in the blink of an eye and you're like, Wow, I'm hungry. And I have nothing. I know it. It's a, it's a weird spot.

Tony Mauro  10:46

It's a weird spot, I actually have a living uncle who is right in that spot. You know, he's 80 years old, that basically just living on Social Security. And it's not much because they were self employed. And they, you know, they didn't really put a lot in. So, you know, it's just not a very good existence, you know, to go all that time. But I agree.

Marc Killian  11:09

Well, you know, so let's talk about Social Security. Because that is, obviously that wouldn't change, you know, it same kind of conversation we were having, you know, our leaders just go I don't want to deal with that thing, punt it down the road, let somebody else deal with it. And we're out here going, you know, what's it gonna do to us? Look at what happened in France last year, right. So they, they call it pension air program there, right. So they changed their pension air program, all they did was right, move it to yours. And you had riots in the streets from people that which made no sense to me that people in their 20s and 30s, really, two years, you're 40 years away from being 60 in your writing over something that's going to maybe have you worked two years longer, you know, so it's kind of crazy. But again, to that point, we've kind of brainwashed people, or allowed them to kind of go down this path

Tony Mauro  11:57

of, of, you know, I don't want to have to make things any harder than they already are. And unfortunately, that's just how life goes. And if we keep making these short term decisions financially, life is going to be harder, it'll be harder. And I think social security, we could do a whole prior to our podcast, on this topic, and all kinds of things. But what what the deal is today really is because some of our older people, obviously they're living longer, don't have as many people in the workforce as we once did. And the families that, you know, we're going to be running out of oil, the trust fund is going to be depleted, I think, by the year 2034. What that will mean, and I agree with you, Congress, you know, just keeps kicking the can down roads to having meaningful, you know, talks about this and try to come up with something bipartisan to fix this. But they'll there'll be a last minute patch, like they always do, which I don't agree with. But the biggest problem with Social Security is we don't have as many people contributing, and then we got a lot of people taken. But like you said, though, you know, people in their 50s, even though I'm not counting on it, you know, you kind of feel like, well, I have been contributing for 40 years or 30 years. If you're not going to give it if if the benefits not gonna be there for anyone, just give me my money. And I'll go go my separate way. But I mean, there's a lot a lot of mixed feelings on that from people that have contributed a long time. I just read this morning, in it was an investment article about there's a proposal out from the investment community, that if they would basically take away the tax deductibility of all 401, k's and or IRAs that can that would contribute like 1.3% of the GDP, and they could use that to fund so you know, to make up for Social Security. I mean, it's, it sounds out there, but it's an idea. I don't know if I agree with it, but it just people need to come up with some ideas, you know, and on how to fix that. For the next, you know, 100 years. Yeah, so yeah,

Marc Killian  14:00

and it's all those little pieces, right. To your point, like, I mean, even talking about the France thing, is that gonna go, you know, we have 62 is early retirement, well, what if they just pushed that back to 64? or eliminated it, you know, you know, and just said, 66, is it or 67, depending on your age, there's talk of moving that, you know, to 70, making that the thing, so there's about a million ways they can do it. You know, there's the means testing conversation. To me, it seems like they should just grandfather things in for people and say, 50, you know, birthday 50 and younger or whatever, yeah, you're gonna probably not be eligible for early retirement, we're going to remove that 62 Altogether, or make it push it back to yours and supposedly funds it for 100 year so they just no one wants to touch it because they don't want to be the person who gets you know, labeled as either, you know, destroying it or removing it or whatever you think, Hey, if you're the one who fixes it, though that can be it can be a big win for you. So

Tony Mauro  14:51

yeah, and it's not going to be an easy and not everybody's gonna be happy. No, for sure. So they just they've got to, they've got to come up with something because I don't think Until let let it just, you know, eventually fail. But there'll be some. I just Yeah, I don't want to get into that

Marc Killian  15:06

and get to right. Yeah, we as they were definitely, we're definitely already soapbox a little bit on these episodes right now. So yeah, it's hard not to write because our lines have blurred so much, how do you talk about just simply the X's and O's of finance without looking at the bigger picture of what's going on in our world, with our leaders, and so on and so forth. So it's, it's tough, right? We're in this interest? Well, and that actually works really well, for this last point, Tony, number 10, is, you know, easier to achieve financial literacy. You know, in the past, I don't think a lot of individuals felt they needed to be highly financially literate, to get it done, because it was easier. But nowadays, you really do need to be well versed in so many things. I mean, right. I mean, if you turn a blind eye to what's happening politically, that's not smart. But then again, you don't want to go too far in because then people get so opinionated. And so they shut down and they get so frustrated, or they, you know, I mean, we just fight or whatever the case is. So you gotta have a good knowledge base, I think on a lot of things. Now, in our world, in our society, no matter your age, and certainly financially, that's gotten much better, it is way easier to get a lot more information and context. Now you can get that overload a little bit. But you can certainly find a lot more information to kind of build your knowledge base, and then take that to a pro like yourself, who you find that you is the right fit for you that you want to work with and say, Okay, now help me make it all make sense and, and understand them when they're talking to you.

Tony Mauro  16:25

That's it right there is, you know, there's, there's so much information out there, that you shouldn't just turn away from it, you should learn something on your own. But I caution people to when they go overboard, like you were talking, it's because it's it's at us 24/7 Now that you go down rabbit holes, like you would when you're maybe spending too much time on Facebook or something, and you get yourself all confused. And then sometimes either a you're gonna make bad decisions, or you're paralyzed and make no decisions. And so you need to maybe not just take whatever your advisor is telling you, you know, and never pay attention or outside wrap, right? I'm saying, you know, take some time learn about things. And then it's best to bounce it off an advisor, I would say this is where advisors earn, what they get paid if they're if they're doing their jobs properly. Because this is I mean, it's a relationship that, you know, the advisor, hopefully is trying to take you from wherever you're at to wherever you want to be. And everything in between, and all these stuff. These things

Marc Killian  17:28

we've been talking about, well, especially if it's a if it's a sip, what's the word I'm looking for a typical, is that right? relationship, right? Where it's not something where you're just saying, Okay, I'm giving, you know, this person money, and they're giving me advice, but I've given them money, they've given me advice and a plan, but they also generally want me to succeed because when I succeed, they succeed. You know, that kind of thing, right? So it's trying to build is trying to find that right? person, that right firm, that get that chemistry going so that you can work through all these more complicated things that do affect us in today's world. And so that's gonna wrap up our podcast series over the last two here. Is retirement planning harder than it used to be? Yeah, because I think society right now is a little harder than it used to be. It's also easier than it used to be so you know, just like anything is it's a double edged sword. We know life is not. What did I say? Relief was roses and thorns. There you go. That's right. It can be both of well, Tony, thanks for hanging out my friend. We got a little deep here. We got a little interesting, but sometimes you got to do that. Right. So we'll be back with more episodes in the future. Don't forget to subscribe to us here on playing with the tax man on Apple, Spotify, YouTube, all that good stuff. And of course, if you need some help reach out to Tony and his team at your planning proz.com. He is a CPA CFP and an EA have 30 plus years experience helping families get to and through on this journey. So give him a call and reach out to him. You're planning proz.com And we'll see you next time. Thanks, Tony.

Walter Storholt  19:00

Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

Every generation likes to talk about how much harder things used to be when they were kids. Like all of the

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

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Transcript: 

Marc Killian  00:01

Every generation likes to talk about how much harder things used to be when they were kids. You know, we've all gone uphill both ways to school in the snow, all that good stuff, right? But we want to make sure that we're talking about the things we need to do for retirement planning. And is it truly harder than it used to be? So that's going to be our podcast for the next couple episodes. Right here on plan with the tax man with Tony Morrow. Look up in the sky. It's a bird. It's a plane. No,

Announcer 2  00:27

it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:40

Hey, everybody, welcome into the podcast. Tony and I are here to talk investing finance, retirement and retirement planning. Is it harder than it used to be? So we're going to break this into we get 10 points that we're going to cover over the next two episodes. We're going to break this into five and five atony and talk about these a little bit. And just see is it that that last couple of miles you know, like I said, the uphill going into snow both ways to school. So my dad used to tell me right, he's like, he's like, You guys have it so easy. I used to walk uphill both ways. I was like, wait, what? Yeah, go uphill both ways. What's going on my friend how you doing this week?

Tony Mauro  01:16

I've been good. You know, as we're recording this starting tax season, and it's kind of a weird thing, because our weather is was very, very cold. And we got a lot of snow and now it's all gone. And it's 60 degrees as we're taping this so it's weird. It's a weird February's Yeah,

Marc Killian  01:31

really? Yeah, you're warmer than I am today. If you're 60 right now, so I'm, like 52 here. And I'm in the south. So go figure, right?

Tony Mauro  01:39

Yeah, it's just odd to see the sun and this in February, we hardly ever get this. I'll

Marc Killian  01:44

take it and enjoy it. Right. Right. Right, take it and run with it. Well, I hate talking about the snow, right? So at least you gotta get rid of some of that with that sun. So enjoy it while you can. Well, let's dive into it. And like I said, we're gonna break this up into five and five. So we'll do the first five here and and see what, you know, our things are things harder now. Right. I think in some ways, they definitely are. And I think in others, we might see that there is some easier things, but it's all a matter about having a strategy and a plan that will I'm sure that's going to be obviously the overarching theme here. But let's jump in, let's start with the first one job stability and company loyalty, clearly way different now than what it was for our, you know, I mean, we're gonna we're in our 50s. So clearly different than it was for our parents or even our grandparents, for sure. That's

Tony Mauro  02:28

true. Yeah. And the reason that is, is because, you know, back in our parents days, and grandparents, you went to work for somebody for your entire career, you know, and a lot of times that was a goal, right? Yeah, that was that was it. And so people stayed at the same job. And I don't meet too many either on the tax side, or the financial planning side that have I mean, I've been with not only just maybe one or two employers, many, many that get into their 50s. They've been with 1015, sometimes more over their career. And so that's leads to a lot of I would say that that makes it a little harder, because people are jumping around more, you're moving 401 K's that sometimes they don't even get in them. Right. And they don't get that benefit of the old time. I think we're going to cover later but also to is, you know, a lot of these companies don't have the same type of old fashioned pensions,

Marc Killian  03:23

right? Well, there was the stability there. Right, like so if you if you did work that that long, 30 year job or whatever the same place, you did, not only did you have the stability of the job, but you also had the stability of the pension and the retirement plan that they that company tended to offer, right, which definitely made life a little easier. In that respect for retirement strategizing, right, because you had your three, three legs of a milking stool if you want, right, Tony, so you had your pension from that job for 30 years. You had your Social Security, and then maybe a modest little savings, it's you accrued a lot of weight. And you were good.

Tony Mauro  03:57

You were good. Yeah, you know, and some of these other topics will lend itself to that. But that's what you had. And today, you don't have that you've got basically the other two, and I will talk about them. And

Marc Killian  04:08

they're definitely harder the other two to deal with. So yeah, that first one, I definitely think that, in that respect, it's harder now than it used to be for sure. Let's go to housing market stability. All right. So number two here on our list, you know, was it more general? It'd be more stable and predictable? Yeah. I mean, I think there's definitely been times in our, in our society over the last, what, 60 years where home prices have been more stable than they currently are. They've obviously gotten out of control here over the last little bit. I don't know what's your take care?

Tony Mauro  04:38

I agree with that. I mean, I you know, back in the older days, it was, I think, a little more stable, you know, but I think the offset to that we you know, they had higher interest rates back then, for the most part. And I think that, again, though, most of our parents they didn't move around much like we do, and especially our kids, the younger people and so I'd never like to use the home as an asset or a source of income, I guess I should say, when we're retirement planning, it's nice to have the equity. It's nice to have all that. But unless we could turn it into some kind of repeatable and reliable income, everybody's got to have a place to live. And whether it's predictable, or volatile, or whatnot, I still like homeownership, or clients. And you know, and I know a lot of people, young people, especially will fight me on that. Well, I guess I'm old school too. Well, so

Marc Killian  05:32

for a little comparison here, right? So thinking about housing, and you're talking about rates? Just I'm sure you don't remember, no, this totally off the top of your head, but I'll throw it at you for fun. What was the US Treasury bond rate in 1980? Right, so do you have a guess? I'm gonna say it was around eight 9%. The low was nine, the average yield was 11. Point 4.4. And so for having something safe, right, in a bond or whatever. And so you'd go Okay, so we've got that we've got our civility of our job we just talked about, and we've got our home. Well, what was your home mortgage rate? By

Tony Mauro  06:04

the mortgage? Very, very high. Yeah, yeah. I'm

Marc Killian  06:06

gonna say 12 13%. You're right, sir. 13.74, in 1980, was the average. Right? So I mean, considerably higher, right. And now granted, the home prices were a heck of a lot lower. And that's the difference than what we're dealing with now. Right? You're talking six, seven, and 8%. Maybe you're five to 8% on mortgages right now, because of the interest rate rise that we had. But, you know, the prices are out of control. So that I think that's where it also is making it harder right now. I mean, if you're younger person trying to buy a house is pretty daunting. It's

Tony Mauro  06:36

very daunting. My son and his wife have been married a couple of years, they are thinking about buying a home, you know, and when they start looking at it, you start putting the numbers together. And it's hard to make that work as a young person. Get that mortgage in there. I know when I built my first house, and this was in my lifetime. It was 36 years ago. We built it with the land. And it was a small house. Sure, but it was $77,000. Crazy right then. Yeah, crazy. And your truck probably cost that now. Your cars are costing that, you know, in the average home, even here and in Iowa, you know, it's up there a couple 100,000 Oh,

Marc Killian  07:15

yeah, I think the average right man was somewhere between 350 and 450. Yeah.

Tony Mauro  07:19

Which is great. Well, we're in depending on where you live, yeah, part of the country. So it is I think it's rates are low. And I think it's a stretch for these younger people or anybody to get into them, especially the first time. Well,

Marc Killian  07:31

right now the old days are too low. We're we're losing here in the modern era from, it'd be an easier, let's go to three less reliance on personal savings. Well, we touched on that with the milk stool, right? So you had those other two pieces, so you didn't have to have as much saved personally. And obviously, that's completely flipped. Look at all the secure Act changes. I mean, the government, everything is saying, hey, you need to build your personal savings, because that's what you know, that's the ticket, you're gonna have to have that you are and

Tony Mauro  07:58

like, say, totally on us now as as Oh, yeah, investors, you know, it's not, we can't count on our employers. We'll talk a little bit about Social Security here in a little bit. But it's, if we don't save, and we get to the end of the road retirement, it's not going to look very pretty for us. And I do think it's, it's was a lot easier back then only because they had those pension plans. I would make the case, though, that a lot of people back then and we'll talk about a little later as well, is they didn't really know about saving and whatnot like we do today. But and we'll cover that. And that's true. And we've gotten better at that. But we've also had to write, we've had to because there's just there's, we have to rely on ourselves and our advisors, to help us out to get to get us to where we want to be because it's all on personal savings. Now in my my opinion,

Marc Killian  08:49

for sure. And that really leads into number four, which is it was a simpler investment landscape back then your options were way less. So it was a little maybe a little easier to navigate. Obviously, now we've got way more complexities going on. But in some ways, it's also easier to navigate now because we have the technology and we have a lot of different things. And we have a lot more options and a lot of cases maybe better options. But what happens is it gets confusing, because now there is just so many simpler, you know, sometimes can be good, right? So like, Well, what we used to have was just less less options. Now we've got so many options. It's kind of overkill, but we have created a lot of good things. I mean, think about it, Tony, like even ETFs right. I mean, they've only been around since the 90s. You know, so that was a great change from mutual funds, because ETFs are just a little bit faster. There's the little technology allowed that kind of thing to happen. Does that make sense? It did. Yeah.

Tony Mauro  09:42

I mean, they did and I think even with the vast array of investment products available, there are a lot more options to suit specific needs. Yeah, you can really, you can really dial it in now. Right? You can you can dial it in. I mean you know a lot of people Talk orally about annuities and you know, they do have their place, depending on the situation and back way back. Those options were, if they had them, it wasn't like they have today the you know that you've got fixed, you got variable, you got it, you got everything under the sun just in that arena. Yeah, let alone 1000s, maybe now of mutual funds and all of that. So I agree, I think both sides of the fence there, it was simpler. So it was easier. But I think today, we have more options to help us. You got to learn about them and get yourself educated. But yeah,

Marc Killian  10:32

you can really fine tune your your, your investing landscape now, which I think is really necessary leading back to that prior one, right, that personal savings, you know, how you're building your and it's not just the word savings? It's not like money in the savings account? Right? It's your personal, you know, wealth. It's your portfolio that you've built, right, which we know. So you've got to use the tools, you've got to be invested. I mean, you really do because you got to keep up with inflation, right? So it's, it's all this, we talked about it a million times, Tony, it's all this big puzzle that you do have to build. And so I think the technology and the tools certainly have helped in that landscape side of that thing, too. That works well. And in my opinion, it gives you more options to help people build all that personal wealth.

Tony Mauro  11:12

I think, too, you know, even in my case, compared to 1520 years ago, you know, when I was younger in this part of the business, right? We don't have the technology even you know, we have it today. But it's advancing so fast that, you know, we can really dial in people's finances in their plans, with basically just getting the data and getting it in there. And then you could run so many different scenarios so quickly through we used to have to do that by hand.

Marc Killian  11:42

Tony was That was not fun. Don't he was having hand cramps. Were I right all the time. Right. Yeah,

Tony Mauro  11:46

you know, and then then the spreadsheets came along. You tried to do it in spreadsheets, but now you've really got a lot of technology where in the client can be involved, you know, with that they can always see where they're at see their plan, which is great. So yeah, yeah, there's there's a lot of things. Good things I like about the technology,

Marc Killian  12:03

for sure. Are you at the 30 year market? I know you've been doing this quite a while i is 30 years. 30 years? 31 years? 31? All right, yeah. 31 years. Yeah. So yeah, I mean, a lot has changed, right? In the industry. You know, you're a CPA, a CFP, and an EA. And, again, you've seen a lot of changes that, you know, you don't go so far back at where you're just using the abacus. But no, but when I got out of college, when I went to work for a CPA firm, I literally had two pencils and an adding machine on my desk. Nice. Nice, good stuff, right there. All right, well, let's talk about the last one higher interest rates since you know, we, interestingly enough 2022 In parts of 2023. And even still right now, but certainly felt like this interesting, you know, what's that saying? History doesn't repeat itself. But it often rhymes. Well, everything felt like the 70s all over again, you know, in in a very interesting way. And not in a great way either. Gas prices are high interest rates were high, you know, shortages, all these kinds of things, we were seeing a lot of stuff, then it kind of throwing back to that. And so we just talked about the bond rates and the housing rates, you know, back in the 80s, they were quite high, even compared to now. And so, you know, it's great to salt a little bit, right was like, Oh, I'd love to get 13% on a CD. But you'd also be paying probably 13 to 16% on the mortgage. So take your poison. Yeah. And then you had you had rapid inflation back then as well. Right. And we have that now. But, you know, that 5% Right now, I mean, you know, four or 5% on a CD or even a fixed indexed annuity, some different things like that. I mean, there's some decent numbers now versus what we even saw just a couple years ago, Tony, but again, you got to have a, you got to have, you know, like, it's like Thanksgiving dinner, it's like that plate, right? You got a little bit of everything in order to have a really good Thanksgiving meal on your plate. If you just had turkey and mashed potatoes, it might get a little boring. Yeah,

Tony Mauro  13:50

I remember when my mom in this was in 87, her data just died. And she had some money, and we stuck it in the mutual or money market mutual fund that was paying like 9%. And, you know, back then, you know, I think with the higher interest rates, what's happened over the years is, you know, inflation has come way down rates have come way down, and for saving for retirement, especially last 20 or so years, except for a few peaks here. And there, it's never been eight or 9%, five, and everybody's jumping up and down, is you know, it's been around one or 2% on the safe side with CDs and things like that. And, you know, people save for retirement have had to say, Look, I can't build anything, you know, what with those kinds of rates, and so they've had to move to other types of investments. But I like the low interest rate environment. I mean, I think it's better for a lot of different things. I know retirees, you know, obviously they want as much as they can, but that whole interest rate thing intrigues me and I know I just watched on 60 minutes they were talking about you know, possibly lowering rates again, the Fed and and where we're going to be at with that had to try to keep inflation in check. And yeah, and bring us back to some sort of normalcy. Yeah, they're, you know, they're talking about it, but it just seems like we continue. And the problem is, is that what we've gotten into society with our leaders and everything else? And again, just my opinion, but we keep making short term decisions versus long term decisions, right?

Marc Killian  15:18

They do. And so we kind of we were very reactionary versus looking at things when a longer picture, and then it winds up being problematic later, and there's like, well, it's somebody else's problem to fix later. Right. And at some point, we kind of have stopped doing it. And you don't want to do that when it comes to your retirement. Well, I'll make a short term decision, and I'll deal with the, you know, deal with the rest of it later. Well later runs out, right.

Tony Mauro  15:41

I mean, like Tony, and I just said, we're in our 50s. Now later starting to get shorter, you know? Yeah. And our government unfortunately does too much of that. If we try that, like you say, we're really going to end up on the short end, which is why we're going over all this, you know, is to hopefully instill some, some visions, some aha moments, something you know, to make sure you're, you're staying on top of your plan. Yep, definitely.

Marc Killian  16:05

And that's why you got to strategize, folks. That's why you got to have somebody in your corner, helping you work through things, it's not as easy as it used to be. Certainly, retirement planning is harder now. Maybe some would argue than ever, you know, there's definitely a lot of things that can be helpful in today's in a environment and era, but a lot of complications as well. So, gotta have a strategize a strategy, and gotta have a plan to help you strategize, a planner, I should say, to help you strategize. So, reach out to Tony and his team and get onto the calendar, if you're not already working with him, share the podcast with others that might benefit from our content here that when we do these every couple of couple times a month, you can find us on Apple, Spotify, YouTube, all that good stuff. So reach out and let them know if you need some help you're planning proz.com All the tools, tips and resources are there at your planning proz.com And subscribe, at least definitely so that you can get the next episode, which we'll continue this conversation on, Tony, thanks for hanging out, buddy. All right, we'll

Tony Mauro  17:00

see you next time.

Marc Killian  17:01

Yep, we'll see you next time right here on playing with the tax band with Tony Morrow.

Walter Storholt  17:10

Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

We're back to wrap up our conversation which might be a bit counterintuitive. We’re going to question the real impact of common financial habits. Are the strategies you consider beneficial actually working in your favor? We explore the pros and cons of practices like paying off debt early and keeping up with financial news. Join us for a practical discussion, as we uncover the unexpected effects of everyday money decisions. Are your good money habits holding you back?

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

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Transcript: 

Marc Killian  00:00

Part Two of our prior conversation on our good money habits holding you back, we're going to continue to have the conversation about the real impact of common financial habits. And are those strategies that you consider beneficial actually working in your favor? So join us here on playing with the tax man with Tony Morrow.

Announcer 2  00:17

Look up in the sky. It's a bird. It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:35

Welcome back into part two of our conversation on those good money habits. are they holding you back? Tony and I back again to talk investing finance and retirement of course, Tony is the CPA CFP a and in the big kahuna over there at tax Doctor Inc. And if you guys have questions, need some help get onto the calendar and have a conversation with him at your planning. proz.com He and his team are here to help you get to and through retirement at your planning proz.com What's going on my friend? How are you?

Tony Mauro  01:03

I am good in tax season is upon us now. So it's gonna be a little busier.

Marc Killian  01:08

I was gonna say I feel like I feel like that's gonna be the theme. I hear from you for the next couple of weeks. When we talk as tax season. It's tax season. Oh, yeah, it's tax season.

Tony Mauro  01:18

Now, it's, you know, the IRS, right, it has kind of delayed the start of the tax season, they always do this. And they kind of cram it into, sometimes less and less time. So it's always that that crunch, you know, and we don't well, we don't work ourselves to death, like we used to. And you know, so we have some cut offs there. And so it's not as bad, you know, as long and stuff as it used to be. But nevertheless, it's busy.

Marc Killian  01:43

Exactly, exactly. Well, I won't keep you long we'll finish our conversation. That way you can get back in and work on these things we got to do. But we started off with our first five right on some good money habits, are they holding us back. So we're gonna continue and of course, you don't have to listen to the prior podcast folks to check this one out, or enjoy or pick up some nuggets of information from this one. But it certainly isn't a bad idea. So make sure you go by and check that out. You can find it at your planning proz.com or subscribe to us on Apple, Google, Apple, YouTube or Spotify. Just type in playing with the tax man in the search box. Alright, so let's go to number six here have our total 10. Tony paying off debt early. Hey, you know, good habit, right? Reduces long term interest payments can provide a nice mental boost, especially when you pay something off, you're like, oh, yeah, you feel really good about that. But Why might it be bad to pay off debt early? This can be interesting.

Tony Mauro  02:33

I think, you know, I definitely advocate paying off high interest debt, of course, and get rid of all of that. But sometimes, especially in the mortgage area, you know, some of us that have had a mortgage over the last, what, 710 years where you've got low interest rates, if you pay it off early, you know, you could be, you know, basically using that money. In other words, you you take cash flow out of your out of your monthly budget to pay that off. And you could be using that to get higher returns elsewhere. And still, the net is quite a bit of a plus for you. So if you've got a low interest loan, you got to take a look at it work with your advisor to see if this is the best thing for you. I do advocate staying out of debt and being out of debt. But every once in a while, it's not that bad of a deal, especially on like, say on home mortgages.

Marc Killian  03:22

Right? Yeah, you know, so you got to kind of take a look at how you're dealing it and really kind of the debt thing will kind of play into that lazy money conversation, maybe right, some of that extra money sitting in savings right now or something like that. Right? So because, you know, if you're, you're thinking, Okay, I'm getting, you know, I can get 4% on the CD, because the numbers have been better, because we talked a little bit about the fact that the feds are probably going to cut rates this year in 2024. But you know, you're paying off your house more, if you're lucky enough to have like a 3% mortgage, right? Well, yeah, you're making 1%. But could that be better use someplace else? Right? So let's, let's say you're gonna drop 50 grand on your mortgage, and you know, and you still weren't paying it off, you were just gonna get it knocked down a good chunk or something like that. Could that 50 grand be making you more money someplace else? safely, of course, I get that we want to, you know, find a vehicle that, you know, kind of works well for our risk tolerance. But again, that's why maybe paying off too much debt early. Bad debt, probably certainly a good idea to get rid of quickly, right? Yeah. Does that make sense? Yeah. Okay, cool. Make sure I wanted to make sure I was following you there. Number seven, staying informed by watching and reading financial news or listening to podcasts. Right. So another way to do it. Good side, right. Financial education is important. Not a bad idea to be up on various different things. That's why we try to that's why I always say, you know,

Tony Mauro  04:43

hopefully you picked up a useful nugget or two of information from our show. But be careful, right, because there's an awful lot of talking heads ton of it, especially I mean, you got podcasts like we're doing of course, stuff you view the internet everything everybody's got an opinion right in it. It tends to be if you tend to get too far into it, maybe information overload, I think could be bad, I think you could end up making some rash decisions, I would say, if there's nothing wrong with listening and gathering as much info as you can, I would definitely say, to, you know, run it by your advisor, you know, because they are going to be the ones that can, you know, lend some credibility to some of that stuff you hear, and whether it fits into you know, what you're trying to do. So just be careful. And the other thing is, unless you really enjoy getting information overload, eminent just just for your own time sake, you know, go do something else. It's fun, unless, again, unless you really enjoy it, it's yeah, it's

Marc Killian  05:41

so funny how our society is so geared that we have all this tech, we have so many things that, you know, making our life, you know, supposedly easier, but they're really time socks. And the next thing, you know, you go, why the hell the day go, you know, right. And it's just, it's amazing. Like, again, the wife and I were on this diet, you know, it's still January, and we're still hanging in there. And, and it's cooking healthy takes so much time, you know, yes. And so it's no wonder that our society is a little heavier, because it's easy to run to Taco Bell, and so on and so forth. Right. And I think the same thing financially, sometimes, sometimes it's easy to think, Okay, well, I'll just, you know, I'll just Google something real quick. And then I'll just, you know,

06:25

the first two or three things is the what, probably what I'll go with, but it might not be the right thing for you, right? Just kind of like that taco. It tastes good, but it might not be the right thing. That's right. You know, speaking of that healthy eating not only takes a long time, it's generally more expensive. Oh, Wally, way more expensive, way more expensive. Yeah. And I'm actually tonight, I'm in charge of going home, and I gotta go get the ingredients. So you

Marc Killian  06:50

got to go out and get the ingredients. Hmm. I

Tony Mauro  06:53

1. And but it is, it is painful, you know, to go out and do that. And you. You cook it in now? Yeah, it's gone in about 1520 minutes. Yeah. Well,

Marc Killian  07:03

I don't want to go down that avenue, because that's what the wife's complain about Thanksgiving. I'm like, Yeah, but it's so good. She's like, I spent all day on this. And I was like, yeah, man, it's good. I tell you what, the healthy thing right, I know, we're off on a tangent. But that's the point of the podcast is just talking about life in general as well. And how it relates to finance but thinking about like even just wastefulness. So help this healthy eating out to your point, it's expensive. And so the other day, she bought one of these vegetable things, as already, it's all kind of pre cut stuff already. It's already kind of sealed up in the plastic and blah, blah, blah, right? It's about you know, a smorgasbord of vegetables already kind of pre done for you to make your was a call that meat crop or whatever the whenever you're making your stuff for food. And as soon as she opened it, she pulled the lid off of it. And the smell hit us like a ton of bricks. This was brand new, and the vegetables were were bad. They didn't look bad, but it wreaked. Right. And so it was like, well, that's total money gone down, right down the drain, you know, and so and so I was joking with the wife has said, you know, what, never, you know, gets mushy and smells really terrible and goes bad like that. And she's like, What, like doughnuts.

Tony Mauro  08:10

That's like so much preservatives. And

Marc Killian  08:13

she's like, You suck. And I said, I know. I know. But you know, it is it's expensive. So you definitely you got to be on your toes when you're trying to do you know, financial stuff, and healthy eating right? Learn a lot of stuff out there. Alright, so that was informative news. Let's go to number eight. global diversification. That sounds good. Tony spreads out the risk, right? You can capture growth and different economies. Give me some negatives to think about here? Well,

Tony Mauro  08:37

I think the one thing with the negatives is while it you know, depending on what you're doing, and which countries you're investing in, it definitely could add to the complexity, because a lot of these different countries have different laws, different regulations for their securities and whatnot. And the other thing is, is it does increase your risk, because obviously, there's a lot of volatility, generally, when, when a certain country is doing well, other countries are not, and vice versa. And it would behoove you definitely to get with your advisor, maybe even choose a fund versus individual securities, if you're going, you know, globally, because it's impossible for us sitting here, wherever we are, to get any type of what I would call, you know, in depth research and even if you have it, are you gonna be able to understand it, it's different accounting rules, different laws, everything else. So be very, very careful there and make sure that you get the diversification you need. I'm not opposed to global diversification. I think it needs to be done wisely. Okay. All right.

Marc Killian  09:37

Yeah. So cuz you're definitely exposed to more volatility. So Right. So if you're not comfortable with volatility, got to take that into consideration. All right. Number nine, that emergency fund constantly building it? So you know, we've talked about this before, but like you got 100 grand sitting in the savings account? What kind of emergency Do you have, that's going to cost $100,000? You know, did you get your you know, did you get your dog kidnapped, gotta pay Have 100 grand to get it back, right? So it's a great safety net to have. But just be careful, right? Because obviously, the downside of this is that your your basically, your savings account, even with the higher interest rates, were in telling your savings accounts not paying you four or 5%. So you're losing money safely.

Tony Mauro  10:15

You're losing money safely. And you certainly can continue the good habit, but maybe just reroute that money to something that could earn you a little bit more put it to work for you. Right. Yeah, be a put it to work better for you. You know, it's great to build up a really good emergency fund. But after that's done, like you say, there's no sense of just keep putting money into that you got to you got to keep it working better for you.

Marc Killian  10:37

Yeah. And, and if you're a retired person, obviously, the emergency fund conversation is completely different than if you're still working, right? Yes, yeah. And it's also that comfort, that comfort Tommy level of like, what's the amount in the savings account, a savings account that makes you both feel good to sleep at night, find that number kind of something fair for eat for both of you. Because it can be one something where one party in the marriage wants, you know, a big number and the other party is fine with less? And you know, so you want both to be comfortable, but you got to again, not have it, you know, being ineffective, too. Right? Okay. All right. Number 10 final one here, patients making financial decisions and building a plan. Now, again, this is kind of like our fifth one on the prior segment. In some cases, delaying your decisions, to get more information or to you know, check things out, can lead to better outcomes, right, it could lead to making impulsive decisions, I bought something over the holiday Christmas break, I shouldn't have. Right, and get some more information. But when, when that patients turns to do nothingness, which humans are really, really good at procrastination,

Tony Mauro  11:41

it can certainly harm you, it can harm you, because you can't get off the sidelines. And sometimes you tend to overthink slash over analyze, like say there's nothing wrong, being patient, getting all the facts, working with your advisor. But at some point, you're going to, you know, make your goals, you're going to have to make some decisions, and you're going so, and hopefully the advisors, you know, and that's what part of what you're paying them for is you know, to keep you on track. Get you going keep you going. Yeah, because we are as humans tend to not want to change.

Marc Killian  12:10

We're really, really good at procrastination, aren't we? Yeah. You know, and not like, I know that some people are really, you know, the opposite. That's great. But I think a good portion of us are pretty darn good at procrastination, and it may be in different arenas, right? Some people are really on the ball about this, but procrastinate the heck out of that right, you know, so on and so forth. So it's a treat, we all kind of carry around so just be careful. So that's our podcasts were good habits can sometimes maybe hold us back. Hopefully you found that informative. And of course, as always, if you got questions need help. Before you take any action, always check with a qualified professional like Tony as I mentioned earlier, he's a CPA, a CFP and an EA He's got the whole alphabet soup, right there on his business cards. If you need some help, reach out to him at your planning proz.com That is your planning proz.com And subscribe to play with the tax ban on Apple, Spotify and YouTube. Tony, my friend. Thanks for hanging out and good luck with dinner tonight. All right, thank

Tony Mauro  13:07

you. We'll see you next time. Yeah, we'll

Marc Killian  13:08

catch you next time. It'll be into February here on plan with the tax man with Tony Morris.

Walter Storholt  13:18

Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

This episode might be a bit counterintuitive. We’re going to question the real impact of common financial habits. Are the strategies you consider beneficial actually working in your favor? We explore the pros and cons of practices like ignoring account statements and strict budgeting. Join us for a practical discussion, as we uncover the unexpected effects of everyday money decisions. Are your good money habits holding you back?

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

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Transcript: 

Marc Killian  00:00

This episode might be a bit counterintuitive, but we're going to question the real impact of common financial habits. Are your good money habits holding you back this week here on plan with the tax man? Look up in the sky. It's a bird.

Tony Mauro  00:14

It's a plane.

Announcer 2  00:16

No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:29

Hey, everybody, welcome to the podcast mark here with Tony once again to talk investing finance in retirement. And actually we're gonna do this over a two part episode. This week's and our next episode we're going to do are those good money habits you have holding you back and basically I've got some good money habits that if we're doing good things, hey, there's nothing wrong with that. But could there be a disadvantage? Or could we be maybe going a little too far in one direction and we want to make sure we have some balance in there so that's gonna be the topic of the conversation this week with Tony here on plant with the tax man, my friend what is going on? Welcome to the new year. This is we're taping this here in early January. So I know we've all gone through the New Year stuff but Happy New Year, my friend. Same to you.

Tony Mauro  01:09

It's good to be back tax season will be here before we know it. And as we're taping this, we got a lot of snow coming down. Yeah, that's

Marc Killian  01:16

what you're telling me. You're getting Blizzard Blizzard fi so yeah, and we're getting heavy, heavy winds and storms and possible tornadoes later. So it's, it's an interesting day for us to be talking. But that's alright. We'll get in there. We'll get in here. That's how that's how determined we are in to do a good podcast, right?

Tony Mauro  01:31

That's right.

Marc Killian  01:32

Ray. What are we like the the what is it? The Postal Service? We're rain or snow? Tony and I are doing a podcast? That's right. Or good stuff? Well, Tony, this is our 100th episode, by the way. So not only are we getting hit with storms, you and I in different kinds of storms in different locations, but we're celebrating our 100th episode. So kudos to you, my friend. I feel like we need a drink or something.

Tony Mauro  01:56

We need a little celebration. As it seemed like it's been that long.

Marc Killian  02:00

I know you guys need some balloons or some scotch and or drinks or something. I'll well we won't do that. We'll keep it straight. But you know, Anyway, congratulations, and thanks, folks, for hanging out with us here for you know, whatever episodes you happen to catch, and how long have you been watching or listening? Excuse me listening to us. We certainly appreciate you. And hopefully you'll enjoy this week's content. Well, let's get into these money habits. So Tony, I want to break this up. I've got 10 of them. Okay, I want to break it up over the next two episodes, we'll do five this week. And I'll kind of give you the good okay, I'll kind of set up the the main piece here and kind of give the good you know, way of thinking about the good habit. And then you kind of maybe give us the counterpoint as to some things to think about it to where we don't drifted into a bad habit. Does that make sense? Okay. Yeah. Okay. Sounds good. All right. So let's start with ignoring our account statements, easy to do, right? We get these statements, we get things all the time. And some folks, they just, you know, open the financial drawer and toss them in there. And I guess the good side of that would be like, it avoids overreacting to short term fluctuations, right? Because you're not looking at it. Right? So you don't have to get all upset every time you go, Oh, man, it's down a little bit. Right. But why might that be a

Tony Mauro  03:08

bad idea? Well, it's, you know, it's sometimes a bad idea for a number of reasons. You know, one thing is, you may get into such a good habit, which you never look at them, and you really never know how you're doing. The other thing is, is, if there's some changes that have gone on in the account, maybe something that doesn't look right, you know, I hate to use the word fraud, but it's not, you know, it's possible in today's age, that that can be going on. There's other issues such as well, you know, you're gonna miss an opportunity maybe, to make any types of adjustments to the portfolio. So it's while it's a good idea, and I hear a lot of clients say that I don't like to look at my statement, especially if after I've watched the news, but I think you'd probably need to keep it on the good side, you need to review it at least once a quarter, you know, and not just throw them in and never review them at all, because I think you're doing yourself a disservice by doing that. And hopefully your advisor won't let you do that either. Or asking you for for a meeting every every so often. And worst case, they're going over it with you so you can at least understand what's happening.

Marc Killian  04:10

Exactly right. I mean, it's they can get confusing, I get it, but we shouldn't just always throw that stuff in the junk drawer, the financial junk drawer and not look at it. Okay, keeping a strict budget. Okay, now, this sounds like a good habit to have, right? Certainly, it helps you ensured some discipline on your spending and your saving helps you achieve your financial goals. But strict budget Oh, be careful, right. So what's some bad things to think about here? But

Tony Mauro  04:34

I think sometimes people that really love budgets, and frankly, you think an account like B would love budgets, I really don't. I don't I don't follow one I kind of do and I do in my own personal life, but I don't let it get to be too restrictive because obviously, you know, if it's too restrictive, it gets too stressful. Sure. You feel like you can't have any fun in life. And you know, I think you miss out on Some things so I'd say set a budget. Don't go overboard and feel like, you know, if you miss on some things, you really beat yourself up because it's, you know, it has to be a flexible.

Marc Killian  05:10

Yeah, exactly. The flexible diets Exactly. Yeah, exactly. Here, we're in a new year, or you're probably on some sort of diet, maybe people are right, so five people, you know, and I think that's the key to like, we get emails all the time from people, they're like, you know, I just got to retirement. And I'm really like, or the fear of like, I've been saving and been really good about saving, now I have to pull money back out, and it stresses me out, right. So they're on a budget, and they kind of maybe, then they get a little too tight. But to your point, you've saved all this money to enjoy it. And retirement, having a strategy and a plan is going to help you especially laid out in black and white, it's going to help you feel good about actually pulling that money out and using it for things that you want to so Exactly, yeah. Okay. Number three, investing in familiar stocks, again, sounds like good and practice, right? So invest in what you know, has always been sage advice over the years. And it's certainly easier to understand, you know, things when you have a familiar arity to them. But you know, I mean, all you could just, I could just throw out the word Enron as a reason why it could be bad, right? So, you know, just don't want to go overboard. And in any one thing.

Tony Mauro  06:14

Yeah. And with with your example, with Enron, for example, I mean, you what you really lack if you stick to just a few things, you know, then you lack diversification. And if any one of those particular securities in that case, you know, you mentioned Enron go bad, which went bad in a real bad way, big way, I should say. And, you know, that's really going to hurt your overall portfolio. So, you know, while you want to stick with, you don't want to get too into exotic investments and do that kind of thing. You want to work with your advisor, on diversifying your portfolio, not only for the number of types of securities, but also based on your risk, and also based on tax efficiency. So yeah, definitely. I think that that that particular one could go bad in a hurry, you

Marc Killian  07:02

know, yeah, exactly. You know, and it's like, and sometimes Well, again, I'll use some examples where we get emails and Tony to the show into to your website, where people are, like, you know, hey, I was left some, you know, an inheritance when I was left some money from or less some stock from mom or dad, you know, and dad had, you know, stock X for 40 years. And you know, he really loved that, I really love them, I don't want to sell them. And yet, you're looking at it thinking this is probably not a good thing for you to hang on to, right. And that's why I'm not gonna pick any particular company. But again, you've got like this attachment to it. And it may not be the best thing for your financial situation.

Tony Mauro  07:34

It really is. I just had a big accounting client that we do their monthly accounting for. And he's very reluctant. He's a young guy to get a 401k going for his business. And his biggest fear is that he watched his mom and dad, they worked for a company here locally, for almost all their lives. And they all of their investment, or their retirement savings was in that stock inside the 401. And it went under. Yeah, so he's very skittish of the market because of that. Yeah.

Marc Killian  08:03

I mean, I understand that, but but he's the owner of this company. Right. So he's, he's a control versus his parents who work there and didn't have control. So didn't have control. But I mean, yeah, I

Tony Mauro  08:13

mean, but the important thing is, I keep trying to tell him, as I tell most clients is, like you, we're going to, we're going to diversify, we're not just going to end up in one type of security here. Because that's recipe for potential disaster. Indeed, yeah. So I mean, again, you know, the

Marc Killian  08:26

idea here, you know, there's, there's good habits, right, investing in familiar stocks can sound like a good habit, but you gotta be careful to not let it cloud you or restrict you, again, maybe a little too much. Number four, embracing automation. So you know, we're all probably AI to death. At this point. We're tired of hearing about AI at this point. It's everywhere, and everything and every marketing thing is seems like but automation does have some good points. And certainly investing and saving simple saving stuff, right? I mean, just you know, having your money come out of your check, go right to if you're still working as a pre retiree, going right into accounts, hey, that makes things easy ensures that timely bill payment, right? You don't to worry about extra fees, because you didn't pay the light bill on time, you know, or whatever. So there's certainly some good things to automation. But I would imagine the downside, it would be maybe disengagement told me where you're again, you're no longer paying attention, like you should be.

Tony Mauro  09:19

It's that and then, you know, I think to effectively kind of ignoring technology and just refusing to maybe learn or embrace anything new. I mean, especially for retirees, my dad included, you know, he's now in his 80s he's getting like that where he don't and so I can make fun of him a little bit, but he, you know, technology, he refuses to kind of embrace it and learn it. And you know, with an AI, I think AI and all of this stuff is only going to get more and more in depth as we all age, but he's at a point where he feels like well, I don't want to learn anything new. I don't, I don't want to embrace that but then he ends up with things It's like he just had it where he accidentally turned on the. And this has nothing to do with finance. But he accidentally turned on the closed captioning on his TV and can't get it off. And nobody

Marc Killian  10:10

might come to like it. I love it. I'm only 52. And I use it all the time.

Tony Mauro  10:14

He likes it. So yeah, I mean, so he's mad about that. But again, he, he struggles with technology. But I think it's one thing to you know, especially as you get older, maybe you don't want to get too far into it. But I do think you need to keep up. Yeah. And at least tight, you know, don't ignore it completely. terms, and

Marc Killian  10:31

I'm with you there my mom's 82. And she actually has, she actually has a pretty good grasp on some technology. And she does pretty well with it. But then at some other times, I'm like, you know, she'll ask me the same question like for the 30th time, and I'm like, How can you remember all this other stuff? If you can't remember this? I don't know. Yeah, at me alone?

Tony Mauro  10:49

Well, right. But like my, my dad, you know, with in most advisory firms, and really, even if you're doing it on your own, you know, you're logging into a portal, you're looking at your account. If you can't do that, you know, yes, you will get a statement. But everything's going to online. And like said, You gotta at least be able to function and do some of that stuff.

Marc Killian  11:12

Yeah, definitely. So I mean, again, automation can be really useful. So just make sure you're also not, you know, setting and I think think about like this too, right, Tony, the set it and forget it mentality that we talked about sort of with the statements can also kind of bite you here on the digital side, too. Right? You might set up your target date fund, for example, 15 years ago, or something like that. And you're like, it's gonna take care of it for me, and it kind of does. But could there be better options? Right? Could it be better things for you to be doing? So? Alright, and then also the fifth one here, we'll wrap it up this week, then we'll come back in a couple of weeks and do the other five of good money habits. So patients patients getting into the stock market? Well, no, scratch your head a little bit. Good. The good side? Well, I mean, that means I'm not making a mistake, I'm thinking things through, right. I mean, I'm not being irrational or anything like that, right. But you can also pretty obvious here, you can also just sit with your thumb in your ear forever and not do anything, right. You gotta be careful with your patients levels,

Tony Mauro  12:09

as in the first thing that pops into my mind is the whole market timing. Yeah, and people that want to try that and think that they can out smart the market as a whole, it's impossible to do. And, you know, there's, you can just go out and Google things like now and you'll find the studies if you missed the best five days, 10 days in the market, or whatever, timeframe over the elbow, or whatever timeframe you want to use, and you'll see how low your returns are. And so you don't want to be too patient and try to be too picky. The best thing probably, is to dollar cost average and constantly be putting money in good times and bad into whatever you plan, I'd say the market but whatever, right? You are investing in, yep, to avoid that to avoid, you know, getting that emotion into it. And just, you know, make it a habit. A lot of times you can do it through your paychecks, we've talked about it before 401, KS, and that kind of thing. But that's really what you're forcing yourself to do is to not not get stuck in that rut,

Marc Killian  13:11

L for sure. Because sometimes people will see these questions too, where it's like, hey, the markets kind of doing bad. I think I'm gonna pull back on my, you know, my contributions to right, you know, and it's like, but I'll pick it back up whenever things, you know, tip the other way. It's like, No, you're looking at that entirely wrong. Right? Yes. Yeah, it's dipping a little bit. And that's not the most pleasant thing, but you're getting it on the cheaper your dollar cost average. And so keep pumping it in. Right?

Tony Mauro  13:34

It is it's funny that we have clients with their employees that do it in their 401 K's that will say that exact thing is, you know what, I'm gonna I'm gonna pull this back. Mark's not doing very well. So in other words, you're trying to time it because you think that because the markets down? Like you said, that's the exact worst time you want to do it. You want to be in there. What, Why, why you're where your money goes a little further. So we try to talk them out of it. Some of them do, some of them don't. And then the bad thing too, is sometimes people will forget to change it back. Exactly. Yeah. Contributing? Yep. Um, so that's a tough one to see. And I don't advise doing that. Yep, for sure. Do that people

Marc Killian  14:09

do it? Yep. That's where, and that's where some of these good habits sometimes can, you know, best intentions, right. But they wind up kind of maybe backfiring a little bit too. So you always, you know, life is long. You know, life is designed to stay on the ball. You know, we can we can let things slide a little bit here. My wife and I were just laughing about when I had open heart surgery almost 11 years ago. Now. I had to go on this diet. And we're dieting right now in the new year, to your point a second ago in your tongue, being flexible. And it's like, you know, for you to just this diet we're on right now is actually working pretty well. And it's not too bad. And we're actually kind of doing all right with it's like, why didn't we do this versus that hardcore crashing? I had open heart surgery. So we went to the extreme level with some extreme diet, right? And it didn't stick and here we are 13 or excuse me 11 years later, you know, and starting all over again. And it's like it could have been As if we did just, you know, moderation if we would have gone with a reasonable diet versus some extreme thing. And I think that's what happens sometimes financially, we'd have some big a moment financially that happens to us. And we get a little extreme instead of being a little more prudent or being calculating with our moves. I suppose that makes sense. I think so. Yeah. Cool. Well, good. So that's open that translated?

Tony Mauro  15:22

I mean, I think you're exactly right, that whole new year's resolutions and dieting and everything else people try. I mean, we could talk for an hour on just that kind of stuff not even related to

15:33

right. But it means thinking about your findings, or look at the market, for example. So in December, we'll wrap it up here with this, Tony, but in December, right, so you know, late in the fourth quarter, the Fed had their their meetings, right. And they talked about various different things. And they're like, Well, we're gonna not we didn't do anything, and then we're gonna see you, and we're gonna hit pause, and we're gonna wait. And then in December, they go, Oh, we're gonna cut rates probably in 2024. Well, the market loves that idea. Right. So the market got very excited as the year went on down, but then January started, and and some of the reasons why they started, I think, maybe, you know, the prognosticators or whatever, sort of looking at some of the reasons why the Fed was thinking about cutting rates. And then they went, Oh, well, maybe it's not that great, after all. So the markets been off to a rough, rocky, rocky start here, this first part of the year, you know, and I just was on a call yesterday, where, you know, basically, it's a market update from basically our advisory firm, you know, and they've been talking about this for a couple of months. But I think this goes back to our points about the, what they're calling The Magnificent Seven stocks of the s&p 500, that actually accounted for almost all of its gains in 2023. And you know, they were playing it well. But yeah, but if those weren't in there, then the gains would have only eroded or the return would only been X. And, you know, I'm sitting there thinking over these months, everybody interprets these numbers a little differently. You can you can slant them any way to make whatever you're talking about

Tony Mauro  16:56

look good. And I think that back to our big point of people need to be investing regularly, in good times and bad because if you're trying to, you're trying to handpick, and again, market time and do everything else, you're gonna end up with not a lot of return, and definitely not going to meet your goals. Definitely,

Marc Killian  17:15

definitely. So again, so good habits can be, you know, be very helpful, but they can lead us astray sometimes. So be careful with that. That's gonna wrap it up this week here on the podcast, we'll be back with the second half, and just a couple of weeks, so don't forget to subscribe to us here on playing with the tax man at your planning proz.com. That's you're planning proz.com. You can find a lot of tools, tips and resources at Tony's website. And of course, you can check him out on Apple, Google Spotify. I keep saying Google, but it's it's really YouTube now. So Apple, Spotify, and they've converted everything to YouTube. So either way, you can find all the information that you're planning. proz.com Tony, thanks for hanging out, my friend. I'll see you in a couple weeks. All right, we'll see you next time. We'll catch you next time right here on playing with a tax man with Tony Morrow.

Walter Storholt  18:03

Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Welcome to part 2 of our discussion on easy wins in personal finance! It’s important to eventually get a comprehensive financial plan for yourself, but sometimes even just a few minor adjustments in your portfolio can make a big difference. Let’s discuss a few more easy places to start...

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

----more----

Transcript: 

Marc Killian  00:00

We're picking up with part two of easy wins and personal finance. With Tony Morrow this week, we're gonna pick up where we left off on our conversation for the prior podcast, going through 10 places where hopefully you can make some adjustments to get you into better shape. So that's the focus of the podcast this week here on playing with the tax man. Look up in the sky. It's a bird.

Announcer 2  00:21

It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:36

Hey, everybody, welcome into the podcast, Tony and I wrapping up 2023. With our second half of the conversation on easy wins and personal finance. And Tony where you can you know, we're taping this, about two or three days before Christmas. I tried to finish up work this week before we all get out of here and and celebrate the holidays. But can you believe 23 is almost over crazy.

Tony Mauro  00:58

I can't believe it. I know it seems like the older I get, the faster these years go by. And it's interesting, but I you know what, the older I get to though, the more I look forward to the holidays, and spending time with family. So hopefully, everybody can, you know, can relate to that get that done as well, as they can expose? Yeah, well, if

Marc Killian  01:18

you're checking out the podcast, we're dropping this on Thursday, the 21st. So you got just a couple of holiday shopping days left. So hopefully, you've already got that stuff out of the way. And you don't have to run around like a crazy person. But if you do, be safe, and be sane, and all that good kind of stuff out there. And for now, just hang out with us and then listen to a couple more things here. So we're gonna go through six through 10. Tony, on our list of 10 things to work on. So let's let's pick it up with number six, which is certainly right in your wheelhouse. It's the tax efficiency of your investments. So not all investments are tax efficient, right. And so this could be a great place that you could do some tweaks and make some changes, working with your professional, your advisor to you know, really get some good wins.

Tony Mauro  02:03

Yeah, and you know, this time a year, for us, you know, a lot of our clients are asking these these types of questions and tax efficiency. I mean, you know, they get a little confused when they hear it, whether it's, you know, on the news or wherever, and really, it comes down to, you know, being able to analyze what you have, and making sure that, you know, it's not causing you any ill effects tax wise. I mean, and there's a number of ways, you know, that we do that. I mean, for our clients, I mean, we have some, some software and some calculations and whatnot, but you know, you can run it with your advisor, or at least inquire but, you know, not all assets are basically equal in terms of the way that you know, that they're taxed, and how they're treated for taxes. I mean, a lot of times we think, you know, clients will ask us, Well, you know, I've got such and such stock, or sometimes even bonds, you know, that I can sell and take a loss on. But a lot of times, you know, we'll do some tax planning with clients, and then we'll get their statements. And all of a sudden, they'll have some kind of huge capital gain that they didn't tell us about maybe maybe not even unknown about you, and especially in funds. And so then that goes on their tax return, you know, and then all of a sudden, they have a higher tax bill. The other interesting culprits are high dividend paying stocks, which we advocate. And then also interest in bonds and or other types of investments. And those two things are treated differently for taxes. So you got to kind of watch out for that, because bonds and CDs and stuff like that are taxed at normal tax rates, and which is generally higher than stocks. So you've got to make that this this whole thing part of your plan. Like say, if nothing else for taxes. Yeah,

Marc Killian  03:43

and exactly. And this is, I mean, I think outside of having the income plan so that you know how much you've got coming in, you know, each month in retirement, I think this is probably the number two spot, right? I mean, this is where you can truly make or break a strategy. So being tax efficient. And you know, you started out with saying people get a little confused here, and that's exactly why they should turn to professionals in this regard. Because if you've been DIY in it, right, you can, you can grow the wealth. We talked about that all the time, you can grow the wealth a lot easier. You know, certainly over the last number of years, it's a little easier to kind of build up money versus that preservation phase that distribution phase which is retirement and boy being tax efficient could make a big ol big ol swing there so it can over long periods of time especially Yeah. 2530 year retirement that's a long time so so tax efficiency number six number seven, check those beneficiary designations Now we talked about easy wins. So you might guess you could make the argument Mark taxes aren't that easy for me to fix? Okay, fine, fair. So we're cleaning that one up with number seven which is tax or check beneficiary designations. This is an easy win to anybody can get done and should do Tony this. This should not happen like those stories that just about every advisor has about someone getting remarried and then passing away and the ex spouse still being on some accounts on place. and they shouldn't happen, because it's just so easy. You can fix this stuff in like five minutes, you

Tony Mauro  05:04

can, and this, to me needs to be part of everybody's, you know, annual, I guess, review slash plan wherever they do, you need to add this one because it is easy to fix. Now, obviously you got to know where what you have and where it's at. And then you've got to contact, you know, custodians and things like that to, you know, just to double check. It would behoove you, though, to make a list of everything you have, keep it on your own, right what your beneficiaries are, that's what I do. And then it's part of my review process just for my own self. And we do it for every client, as well as, here's the beneficiaries you had last year, anything changed anything, you know, that we need to add? Because, like you say, things do happen. And I think I might have mentioned this on the last show or a while back, I was just checking mine as part of this year, and I found one that I did not have, yeah, you did. Yes, son. Yeah, as a contingent beneficiary. So you know, I just missed it. And, you know, easy change took about 10 minutes did it right online, and fixed it. But if you don't do this bad things can happen. And some of the worst generally are what like, say when a spouse dies? Or a divorce? Yeah. And then it's just a real ugly legal mess.

Marc Killian  06:15

So don't let that happen. Because this is this is an easy one. Yeah, for sure. Yeah, this one, the one, we don't spend much time on this, just get it done. If you've got a professional you're working with, just ring them up and say, Hey, I'm getting a divorce got a divorce, you're probably talking to them anyway, I need to make some changes, or you know, somebody's passed away, and you want to remove them or whatever the case is, just just take five minutes and do it. So Alright, number eight, rebalance the old portfolio. I feel like I should because it's Christmas time, I should say like rebalance ye portfolio. Yield portfolio. You know, rebalancing, I think some of us kind of feel like this happens automatically. And maybe, depending on how things are set up, it could, but you know, is it rebalancing the way that you really, truly need it to? And how easy is this to do? Tony? Like, I think in today's world, right, with so much stuff on these online portals, you probably can go rebalance some of this stuff yourself pretty easily. If you know what you're

Tony Mauro  07:07

doing. Yeah, yeah, if you know what you're doing, you definitely can, you know, it's, it's wise to, you know, make sure that your your rebalance strategy fits your needs, rather than just a general, you know, 60% or 15%. Yeah, you know, in in each type of fund or investment, because what happens is, again, in the investment, world rebalancing, that's kind of some, some, maybe lingo that people don't understand, but what happens is, if you've got your money, you know, diversified in different types of sectors, or, you know, asset classes, some do very well and others don't. And so then you get out of balance, meaning that you might have too much in one sector or asset class, because it did so well. And you want to rebalance that. So in other words, you know, you've kind of taken advantage of, you know, the old, the real thing, you know, buying high and selling low is, you know, you want to rebalance and keep your same percentages, so that based on, you know, whatever your plan is, it doesn't get too out of whack, because we've had it too, or some people will come in they haven't rebalanced for years, and all of a sudden, they have much, much more exposure to, you know, higher risk type of operator investments. And, and they're nearing retirement. And so, you know, luckily, in the cases I've seen, nothing bad has happened, but it could before you get it rebalanced. Sure.

Marc Killian  08:26

Yeah, definitely. So, again, get it done, you know, talk to your advisor, this is something that can be pretty quick. If you're using an online portal, you probably could go in there and make a couple changes and, or even just look at the automation is there to a lot of times, you know, there's I think there's like even checkboxes to automate for rebate is Yeah, yeah,

Tony Mauro  08:43

a lot. A lot of portfolios now, especially if they're using individual fund managers will rebalance automatically. It's their job to go in and do it, you know, rather than having to have you worry about doing it. So if that's available, it's worth looking at. Okay.

Marc Killian  08:56

All right. Number nine, are you under estimating your proper emergency fund? Now, when we did the one last time, right, we kind of framed the conversation on, the first one was keeping the right amount of cash. And we kind of talked about that from a standpoint of maybe being retired, right, just having some cash on hand, I think the emergency funds side of this conversation, you could kind of maybe make the argument that this is pretty similar. But let's talk about this one, if you're still working if you're a pre retiree, right, so understanding your proper emergency fund balance, if you're a pre retiree, in case you do lose your job, especially with a lot of the things that are happening here as the years winding down, you know, there's still a lot of talk that 2024 is gonna be a fairly rough year and businesses have been cutting, you know, cutting people already, right. So you want to make sure you got that emergency fund set, in case, you know, you got to float yourself for a couple of months.

Tony Mauro  09:43

Yeah. And generally, in the financial planning realm, you know, the ego out and Google things and you're gonna get a lot of different answers, but kind of the standard is, you know, three to six months of your monthly living expenses, and that's a good start, but I Do you think you need to take it a step further as work with your advisor on truly what your, you know, lifestyle is and what your expenses are, because maybe you want to up that a little bit, maybe you've underestimated just how much that really is. So six months, you know, what you thought might have been doable might be Ooh, boy, you know, that's a lot to try to try to get to, I still think you should shoot for it. But like you say, in the corporate world, especially with with cuts and things like that you never know, when you could possibly be out of a job. And you know, how hard it is to find a new one. I mean, generally, these days everybody's looking for looking for employees, but that doesn't mean you know, you're going to just grab something real quick. And so I think it's a lot easier to, you know, to figure this out. And I, we asked everybody at tax time, even our retail tax clients, and very, very few even have one, number one, we talked about that last time, but once you have one, you gotta be able to fund it. And you gotta be able to adjust it as your as your lifestyle changes,

Marc Killian  11:00

for sure. Yeah, I mean, think about the different lessons we've learned over over the last few years, right, with the COVID situation, people getting locked out of work and whatnot, you know, and having to have some money to float and get by. So if you're still working and getting good idea, rule of thumb, sure a three month thing is is a great place to start with the rule of thumb rule of thumb, but just also do some a little bit extra digging, just to make sure that that is the right amount for you. Like you said, you can shoot for six, that's even better. So yeah, absolutely. All right, final one here, number 10. automate your savings. We just talked about automation a little bit with the portfolio, but automating the savings, right? So an easy win to get yourself where you want to be. I just what was this I just saw something the other day, Tony, where somebody said, I am blown away by the fact that, you know that if I over the course of time, if I've saved like $100,000, you know, from from a long, long period of time starting younger, that it can easily turn into a million by the time I'm older due to compounding, right. And so it's the idea of, you know, consistently putting money away all through our life, for our retirement well on all these automated things we have now can really help that along as well. So if you're still working, pre retiree, or even some, you know, share this message in a lot of our audiences, you typically, you know, retirees and pre retirees but share it with your grandkids too, right? Hey, automate those savings, you're out in the workforce now, start automating this stuff, and you'd be surprised what happens when you get older.

Tony Mauro  12:20

Yeah, it really is true. And with with today, especially with the technology to be able to do this fairly easily. And you're never gonna amazes me, you're never gonna never, never miss it, you got to learn to live without it. We're such a society, at least in America, you know, want want want everything. Right, that delayed satisfaction, I

Marc Killian  12:40

just I that was almost like, Charlie is almost like Charlie Brown's teacher, right there, you see, wow,

Tony Mauro  12:45

yeah, we just want want, and I'm reading a book, it has to do with physical activity and whatnot. But it's a great saying, and you can apply it here, really, to any of these, and that is that, you know, when you make hard choices, life becomes easy. When you make easy choices, life's can get very hard, which means, you know, in the text of, you know, you have to be able to do some of these things, which seem hard, they're really not, but it takes some discipline, it takes some delayed satisfaction, which is, you know, saving, number one is that, but automating it will help you learn to live without it. And, you know, you forget about it, you know, and then the next thing you know, you know, 3040 years go by, and all of a sudden life is easy for you. And whereas if you don't do this, and as you know, you know, most of us, you get your paycheck, you've got bills to pay, and then you pay your bills, and then you always pay yourself last. And that's exactly the wrong thing to do. This forces you to pay yourself first. And I can't stress that enough, whether it's through your paycheck with with your retirement plan, or even outside of that, it's pretty easy to set up any type of investment to just go into a bank account or savings and, or whatever you tell it to pull out, you know, and put it in the investment as you go. I mean, nobody's doing it for us, right. And it's right, very few of us have have those, those pension plans anymore, so it's up to us. So we've definitely got to try to take care of

Marc Killian  14:12

1. And then wonder if you can automate this stuff, and like I said, you're never gonna see it, then great. And most again, most of you're still working 401 K plans and things of that nature. And you can certainly, obviously, automate this stuff. But you know, you can automate some additional savings too, especially if you're still working. And you feel like you're behind and we've talked many times about little things like the ketchup contributions and various different things. So you know, if you're in a position where you can put a little extra way, there's nothing wrong with feathering the nest for later on down the way right,

Tony Mauro  14:39

that's right, especially just like the last one just talk about automate the emergency fund get it got a little money you know, going in every single month, and again, you won't miss it and then all of a sudden that's that's kind of on autopilot and hey, you know, before long then now you have what you need.

Marc Killian  14:54

Exactly. That's a great point to automate that. That urgency fun, good stuff. All right. Well, Tony, thank you, my friend for hanging out with me. Thanks for hanging out with me all year long as we've gone through is hopefully hopefully shared right some useful nuggets of information. Yeah, the listeners. And of course if you haven't subscribed or you have and you know somebody else who might could benefit from you know the podcast and picking up some, you know some useful tidbits along the way, let them know that they can subscribe to plan with a tax man on Apple, Google Spotify and whatever platform you like using, just type that into the search box or have them go by and we'll give them this website right here. You're planning proz.com That's your planning proz.com where you can find a lot of good tools, tips and resources. Stop by there yourself if you're not already working with Tony and check out some things there. And don't forget to subscribe to us on the podcast as well. And that way you can catch future episodes as well as check out some past episodes and we'll be back with new episodes in 2024, which is really weird to say, Tony,

Tony Mauro  15:52

I know Yeah, I'm looking forward to it and hopefully everybody else's to I've enjoyed the year and hope everybody has a great Christmas.

Marc Killian  16:00

Yeah, indeed have a great holiday season all the way across the board. And Tony and I will be back in January here on a plan with the taxman.

Walter Storholt  16:16

Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

It’s important to eventually get a comprehensive financial plan for yourself, but sometimes even just a few minor adjustments in your portfolio can make a big difference. Let’s discuss a few easy places to start...

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

----more----

Transcript: 

Marc Killian  00:00

It's important to eventually get a comprehensive financial plan for yourself. But sometimes just a few minor adjustments in the portfolio can go a long way. This week on the podcast easy wins in personal finance with Tony Morrow. Look up in the sky. It's a bird.

Announcer 2  00:15

It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:30

Hey, everybody, welcome in to plan but the tax man with Tony Morrow and myself here to talk easy wins in personal finance. With Tony we're gonna get into it. We're gonna make this a two parter for the month of December, as we're wrapping up the year here. So we're gonna go through a few pieces this week on the podcast. And then we'll do the rest of them about a week or so before Christmas. So we will share a few nuggets of information with you guys. As we're winding down the year, Tony, my friend, what's going on? How are you this week,

Tony Mauro  00:57

I'm doing wonderful, you know, getting ready for winter and getting ready for Christmas.

Marc Killian  01:02

Now doing pretty good and pretty much the same thing. It'll be it'll be here in a hot flash, we you know, it's got about three weeks to go at the time we're dropping this podcast, but you know, that'll that'll go by in the blink of an eye. So make sure you get all your stuff done and ready because it'll I'm sure it's gonna be goofy out there to people running around crazy. So keep your head on a swivel. That's for sure. I get this week I got some, like I said, I guess some easy wins for us, Tony, I want to go through a couple of things here. Just give some people some places to think about things where they can make little tweaks. Sometimes, folks think, Oh, I gotta go see a financial professional or I got to talk to a financial person. That's gonna be this major pain is hefty overhaul? You know, sometimes it's just little things, right? So let's talk about the little things like cash. Let's start with cash. Cash, is King cash King this time of the year, right? We tend to spend a little bit more cash, maybe we've been piling it up. And so yeah, maybe it's dwindling down for the holiday season. But if you do have some piling up, you know, just be careful where you got it. Right. Don't Don't let it sit there and be too lazy, especially with the considering the fact that the times that we're in right now, it's only when maybe a money market for a smaller amount for short term, or even a CD could be a good option versus what it has been versus just leaving it in the savings account. It's

Tony Mauro  02:13

because the savings accounts are still doing pitiful, right? Things counts and checking accounts. Yeah, really awful. Nothing, right. But so these are like a like a 12 or an 18 month might be okay. I just saw it, you know, and for years, you know, from our end of it, you know, for people that are looking for fixed income, you know that FDIC insurance, you know, we've had to say, hey, look, it's terrible, you know, you're not going to be able to live now all of a sudden, I mean, I just saw one in the paper on Sunday, 5.35, for 1718 months, something like that. But the point there, though, is, this happens more with my retiree clients, my dad being one of them, he'll stockpile a lot of cash in his checking account. Next thing, you know, he's got $100,000 in his checking account, you know, and it's paying zero. So we have to try to convince those types, that, hey, you know, we're not saying take it all out and invest it, we're just saying, let's put it to work for you. Maybe you know, 60 70,000 In his case, and still remain very safe and whatnot. So even if you're working, you know, I never advocate having tons and tons of money just sitting in the checking. Now a lot of people will say, Well, I'm saving that for a rainy day, well, then that should be in a rainy day fund, that should not be in your operating account. You know, you're just like we do with businesses. We call it the OP X, you know, don't don't just let that money sit there and make it work for you a little bit, even if it's money market rates, you know, yeah, they're not

Marc Killian  03:36

bad start to add up over time. Yeah, yeah. Yeah, for sure. And we'll kind of keep this in a different context. Because all my list also is an emergency fund. So we'll talk about this cash, the cash amount, maybe from the retirement standpoint, because you're not really, you know, the emergency fund conversations a little bit different when you're retired, is it's all coming in, right. But if you're still working, or you're retired only, again, you know, sometimes it just makes you feel good to have $100,000 in cash sitting in the savings account. But is it really the best thing for your portfolio for your plan? When it's just not doing it? It's not it's lazy. It's not doing a whole lot. We don't want lazy money. So

Tony Mauro  04:12

we don't want that. No, and you gotta get clients over the fact that we still have the money. It's just a different account now. Yeah. And it's a lot easier for them if they can see it, because a lot

Marc Killian  04:23

of money markets liquid, right, versus like a CD where you're maybe tied up for 12 months or something a little different. There will differ,

Tony Mauro  04:29

you know, money markets, very liquid, you know, CDs, even if I mean, they're not as liquid, but you're not going to get really hurt too much. If you have to get out early. But yeah, there's a little bit difference in liquidity there. All right.

Marc Killian  04:41

All right. Good to know. All right, number two, cleaning up old life insurance policies. So again, this is, you know, this is an easy win, right? So if you got got an old life insurance policy sitting there that you've had for 20 years, it might be worth taking a look to see if you can get better coverage at a cheaper rate.

Tony Mauro  04:55

Yeah, even though you know, you're much older maybe you know, Because the rates have changed a lot in this area over the last 2025 years. Now, I think it's a good idea to review your policies like we were talking on the last episode as part of your year end plan, but you should clean some of these up. Because one, you may have bought a an older policy that you don't need any more. Or like you were saying, you may be able to get more coverage or the same amount of coverage for a lot less, and extend out that term. If you're, you know, if you've got term insurance, but even the whole lifers in the universal policies have changed, you might be able to roll that into it, you know, whatever cash value, you may have, roll that into a newer policy with better benefits. And so yeah, I wouldn't overlook that, for sure. It's pretty easy.

Marc Killian  05:41

Now think about TVs nowadays, right? You know, TVs are, they're so throwaway, right? You know, the prices are so far down, that if something happens to one, you know, you just go and replace it. And they're not that expensive, versus like our old ones from the 70s 80s or 90s. Right? Where it's like a piece of furniture. Yeah, these furniture had weighed 500 pounds. Yeah, and you'd have to probably service it before you'd replace it right? Well, nowadays, replace it. So before you throw it out, you know, double check those old life insurance policies and stuff like that, clean those up. Liban speaking of cleaning up, number three, cleaning up and consolidating old 401 Ks, you know, if you've got one or two of those, from an old job, it's gonna not only make your life a little happier, but also your financial professional, clean that stuff up, put

Tony Mauro  06:22

them together. Yeah, clean it up, it's easy to do it's paperwork, it takes a little time, I've seen people, as many as like five or six of these, you know, bouncing around, they get statements from different, you know, the, the person is bouncing around over the years, you know, and then next thing, you know, they've got all of these different 401, K's with small balances, you can easily consolidate those either in possibly your new company's 401k. Or if nothing else, a rollover IRA and get it all in one spot. Yeah, make it a little easier to monitor and have more choices. Really?

Marc Killian  06:53

Yeah, tons. And again, it's worth talking to your financial pro about what you know, like, what's the best strategy for doing that and everything and getting it put together. But it is pretty easy to do. And it will give you just a lot more options. So consider doing that as well. Number four reconsider that that managed account you may have may not have a lot of management going on. So if right, for example, Tony, if you're working with someone who's got you into mutual funds, for example, and it's just been that way for 10 years, well, there's not a lot of management happening there, they just kind of let it be right. And maybe there's some better options.

Tony Mauro  07:26

Yeah, and I think they're the key is, is you've got to have a good relationship with your advisor, and they have to be doing something for the management fee, even if they're not changing investments, which, you know, sometimes we're in, you know, a basket of mutual funds, that we tend to rebalance. And so we're at least rebalancing, number one. And number two is we're meeting with the clients four times a year, and then that last meeting, you know, making revisions to the plan, because that's really what you're paying for is trying to keep that advisor or coach, if you will keep a new on track, right. If you're not getting that whether it's, you know, it's sometimes you're right, you need goals have changed, risks have changed, we need to reposition a little bit. But if you're not getting any of that, well, then you're really ended up paying for something for you. No, no, no real value added. Exactly.

Marc Killian  08:19

is speaking to the mutual funds. Tony, my fifth one on here, that will do five for this week, and the likes that we'll do the remaining for the next podcast. But it is Ricans, it's considering replacing those high expense mutual funds, because that is typically the conversation piece. I just saw something a couple of weeks ago, I think it was from New York Times, but I'm not 100% talking about the death of the mutual fund. And so while they don't think they're gonna go away anytime soon, because there's so much money in there from a you know, especially I mean, the institutional thing, but ETFs really have just, you know, clearly taken over in this space over the last 20 years. And just about every advisor, I know really talks more to their clients about ETFs versus mutual funds for a myriad of reasons. Can you kind of break that down a little bit for us?

Tony Mauro  09:04

Well, we do two, we're in that that camp, I mean, most of you know, the funds that we use, you know, our ETFs are a variation of them. You know, Vanguard is a big family, the real thing there is, and I love mutual funds from an advisor standpoint, don't get me wrong. But if you can take different ETFs and get the same diversification, you know, you're basically mirroring the returns and or losses of those particular indexes. And most of the time, the studies have shown that the best minds can't outperform the market consistently year in year out and they lag a little bit. And then their manager fees tend to drag down the returns a little bit. You're talking about the expense ratios and the fee for management. Right, right. And the next thing you know, you're you're a little bit less, and then you've got an advisor maybe in their way to half or 1%. And so, you know it does it drags down the return heard. So we try to, you know, use them. Because basically, if they're paying us a half to 1%, for, like we just talked about, you know, for management and help, we want to keep those other fees as low as possible. And you could do that with ETFs. Now, I could see mutual funds. You're right. I

Marc Killian  10:18

mean, they've got so much money in them that they're not going to go away. But I think more and more advisors at least, and even people doing it on their own right are starting to understand, hey, this is a real option. Yeah, it seems like it's more in the institutional space for a lot of folks. Because ETS, I mean, they trade like a stock, right? I mean, so you're not waiting. We're not waiting till the end of the day before, you know, the total information. And it changes like a mutual fund. The fees are certainly the conversation piece for many people, that typically tend to be a significantly lower when working with an ETF. And it's just technology change, right? I mean, mutual funds were created in the 1920s, you know, and it took till the 1990s, before two ETFs came along, and it could it really took that technology boom, it to create the ETF. So I mean, mutual funds have been great for a very long time. But if there's a better option out there, again, to the point of this conversation, easy wins, it may be worth it to take, you know, to rethink those high expense mutual funds, right? And is that something that you guys do like when you you're doing a review, somebody's coming in new for the first time and you're going through their portfolio portfolio, one of the things you're looking at is fees and stuff and like how to, you know, evaluate and get the best value there? We do

Tony Mauro  11:27

when somebody is coming in new we that's what we look at, we don't really focus on, on returns. And that sounds kind of counterintuitive. But we're like everybody else, you know, we're not doing this, right. Yeah, we're not chasing that. We're we want to get the best return for the client based on their risk portfolio, or risk tolerance and their tax, you know, preference.

Marc Killian  11:50

Yeah. Does that mean tax efficiency, that's going to be next on our list. But that was, I would say to that point, right? fees, and taxes are usually where you guys make, you know, that's where you guys really earn your keep along with, I think the behavioral management of it, because that's where somebody will tend to lose our money.

Tony Mauro  12:06

It does, you know, and it's, I remember back when, when mutual funds you to buy a mutual fund, you know, you paid an 8% to load, as they call it, you know, to go into them. I remember those days. Yeah. And that if we can keep fees, you know, as much as possibly as low as possible. I think, you know, again, at the end of the day, just only going to help your portfolio. And that's, that's what you're paying us to do, right? Yes. Is that's part of it. Yeah,

Marc Killian  12:33

for sure. All right. Well, there you go. So there's the first five of our easy wins in personal finance, some things to certainly ponder there. And as I mentioned it, stop the tax. And we'll talk about that on the next half when we come back a little later in December and pick up the final pieces of this conversation to wind down the year. So don't forget to subscribe to us on whatever podcasting app you like using Apple or Spotify, or now Google, I think, is merged everything. So it's all under the YouTube banner. But either way, you know, you've got all that stuff typically pre installed on your phone. So whichever one you like to use, just type in plan with the tax man in the search box, and add to your podcasting or streaming list of things to check out. And of course, Tony is a CPA and a CFP. And an EA was 20. Well, actually close to 30 years now. Right, Tony? That cost? Yeah, I've experienced doing that, sir. There you go. So if you need some help, they are certainly here to help at tax Dr. Inc. You can find them online at your planning proz.com. That is your planning proz.com where you can also find the links for the podcast of as well. So a lot of good tools, tips and resources there, go check them out and see if they can help you with your situation. You're planning proz.com All right, my friend. Thanks for hanging out. Thanks for running through these first five with me. And I'll talk to you again in a couple of weeks just before Christmas, and we'll do the other half. All right. Well, sounds good. And

Tony Mauro  13:51

we'll look forward to talking to you then.

Marc Killian  13:52

All right, we'll see you next time. We'll hang out with Tony Morrow right here on plan with the tax man with Tony Morrow from tax doctoring.

Walter Storholt  14:05

Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a VAT tax advisory services insurance services offered through an event tax affiliated Insurance Agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Join us for a thoughtful episode where we unpack our 2023 edition of key year-end planning strategies for those nearing or embracing their retirement years. We'll explore the nuances of optimizing your investment portfolio, safeguarding your assets, and ensuring a stable, rewarding lifestyle in the years to come. Together, we'll navigate through essential topics like managing RMDs, exploring tax-saving opportunities, and even touching on the often-overlooked emotional aspects of this pivotal life transition.

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

----more----

Transcript: 

Marc Killian  00:00

Just a thoughtful episode this week here where we unpack our 2023 addition of key year in planning strategies for those nearing or embracing their retirement years. That's up on the docket this week on plan with the tax man for end of year planning for 2023. Look up in the sky. It's a bird. It's a plane.

Announcer 2  00:19

No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Hey, everybody,

Marc Killian  00:33

welcome into the podcast. It's playing with the tax man with Tony Mauro and myself here to talk investing, finance, retirement and end of the year conversation. We got some things to go through this week, here on the podcast that you might want to ask your advisor about or reach out to your financial professional about if you're not already working with Tony and his team. Certainly something to have on your radar. So we're gonna dive in lost a cover this week on the show. What's going on my friend, how you doing? I'm doing well. How about you hanging in there doing pretty well, you and I are just chatting. We're taping this a couple of days before Thanksgiving. So Happy Thanksgiving to you a bit early. You'll be we'll be celebrating later this week. So hopefully all our listeners have a good Thanksgiving as well. That's

Tony Mauro  01:12

correct. Yeah. And it's not, you know, we're getting a lot of things on the docket, because tax season will be here. Before we know everybody's you know, focused on the holidays. But season is upon us.

Marc Killian  01:25

That's right. It'll fly by right. I mean, Thanksgivings in a couple of days, like I just mentioned, and the next thing you know, it's Christmas, and then boom, the new year. And then Hello, 24. Right. So dry. Well, let's get into some stuff. And we'll talk about it. And we'll try to keep our food conversation to a minimum. So we don't get hungry before everybody can feast on the makes themselves super full coming later on this week. We'll get into some good stuff here on this side of the thing on the side of the coin. Let's talk about general Planning and Investment Strategies. Let's start there, Tony, what a cut what's a couple items that folks might want to have on their end of year checklist in this arena? Well, I

Tony Mauro  02:00

think the first thing is, you know, as we're taping this, there's still time for this is to look at this kind of more tax planning, but look at possibly increasing or maxing out your contributions to your retirement plans. If of course you're working, because that is going to save you some tax dollars. And you know, obviously, it's going to get you a little closer to that retirement savings goals. So that's when we talk to a lot of people about this time of year, especially our business owners even, you know, they've got plans that they haven't put maybe as much in as they could, and they're looking for tax deduction. And that's a great way to do it. That's that's one thing. The other thing we look at with more of our individuals, but really everybody is at the end of the year, generally, we try to do a lot of rebalancing of our clients portfolios, along with looking at you know, where they're at on the risk spectrum. And that sounds complicated, but it really isn't, it's basically just taking a look at what grew what didn't and keeping, you know, adjusting things to keep the same balance in the portfolio, as we had at the start of the year and gotten the theory there is really is you know, you're you're taking and keeping that balance the same and the things that underperformed, you know, you're gonna rebalance and put some stuff in there because not everything generally goes up at the same time. And it's a good way to, you know, make sure that we're staying on goal. But I think the bigger thing we tried to do is go back through our risk assessment software. And, you know, we make our clients basically kind of re answer a few easy risk questions, if something's changed in their life, you know, it could be something big. And maybe maybe we need to adjust some things on the risk spectrum as well. Yeah,

Marc Killian  03:43

that's great point for sure. So rebalancing, and risk is one maxing out contributions is another when we're thinking about a couple of general planning ideas for the end of the year. And I think you started to touch on this for a second when you mentioned taxes. So let's talk about taxes. Next, obviously, tax loss harvesting this time of the year, we started thinking about these things as the years winding down going into next year, correct?

Tony Mauro  04:04

That's correct. Yeah. And a lot of people tend to overlook that. And a lot of people don't like to sell or get out of things that they're down. I mean, harvesting really is just about, you know, taking things that maybe don't make sense in the portfolio or, you know, maybe being down and selling those at a loss to offset gains, is really all that is, and it's a great strategy. It's easy to do. You just got to get by the fact that, you know, well, I don't want to I don't want to admit that it's down and I want to hold on to it forever. Because you know, who knows, right? That's one thing. You know, I think it's it's good. There's also a lot of tax credits coming on the book, the energy credits are coming back. That's more of a tax related issue rather than than financial, but it does help. And there's still the Roth conversions, you know, that you can make and, you know, for a lot of people I particularly liked those Roth conversions, even the backdoor IRAs as well, to get some money out. Have the IOU that you're going to owe Uncle Sam, you know, eventually.

Marc Killian  05:03

Yeah, you're right, exactly. And speaking of Uncle Sam, and owing them also RMDs, right. So as the years winding down, don't forget, especially if you have not started, if you're already in the pipeline of doing RMDs, you're pretty much groovy, right? This is going to count this is going to happen. But if you haven't started yet, do not forget it, especially since the rule change. And it's 73. Now, right?

05:24

Yes, it's 73. And so you definitely want to make sure that you get to your, your advisor, and make sure that they get those started. So you don't have to deal with a potential penalty letter and fighting with the IRS and all of that, right. And with the winding down telling us what 1231 is the deadline, but let's be honest, right, right. Places are closing people are off. There's, you know, a couple of weeks, actually, yeah, Thanksgiving week, Christmas week, so

Marc Killian  05:48

on and so forth. Exactly. I

Tony Mauro  05:50

mean, you know, with with everybody, it seems like yeah, not not a lot gets done in December. I mean, it's a little VIP, right? It's weird here, because you think like now after, like, 15/17. Boy, it's really hard to get things done. And if you're going to do RMDs, you want to make sure that that's set up properly, not wait until the last minute and risking it. But if you're just gonna reach out to your advisor, you know, we get a report, of course, for everybody that's turning 73. So we kind of know we reach out to them. But if your advisor hasn't reached out to you, and you're going to be turning, make sure you talk about that.

Marc Killian  06:25

Yeah, definitely. Okay. Because again, it's it's a hefty penalty if you don't do it. So if you've not started, make sure you're having that conversation. If it's the first one. Tony, you can continue this on technically you can your first RMD you can pay it into the next year. Right. You've got that very first time. I think it's until April of next year, but just be cognizant that that means you have to do to next year end to Yeah, so

Tony Mauro  06:48

you can kick the can down the road a bit. But yes, and you're going to have that one year where you're going to have to do two and depending on how much you need to take out. Right. It can be heavier. Yeah. Yeah. Could be hefty. Yeah. I

Marc Killian  06:59

mean, let's say let's say, Yeah, let's say hypothetically, Tony, you got a million dollar for a one or an IRA. And you've got to pull under the calculations kind of wonky. But for keeping it simple for folks, it tends to be somewhere between around right around three and a half percent or so that first time it grows, obviously, based on mortality tables, but I mean, let's let's, you know, that's 35 grand, right? And if you had to do that twice, like in the next calendar year, that could be that could kick you up a tax bracket. So just be careful. It could Yeah, absolutely. Okay. So good stuff to remember, for the end of the year, make sure you're having that conversation about your RMDs. Anything on insurance or health care or health care planning sign, Tony,

Tony Mauro  07:38

the other thing I would say there, I mean, there's a lot you could go into, I would just double check, again, with your advisor, hopefully you're talking about this just kind of reviewing, what you have is Does it still make sense? A good thing is to check beneficiaries on insurance policies. I actually was going through my my own this was actually on my retirement accounts, just double checking as part of my own due diligence every year when checklist and I found one that I did not have my son on as a contingent, you know, so I added him. So, you know, there's that kind of stuff, you want to make sure that your coverages are still complete, especially if you're on Medicare, and things like that. And there's not something you might need. I always tell people, it's a tough talk, but to evaluate, potentially, if you're still able and willing to look at the needs for long term care policy for that potential, you know, that you may end up in some sort of assisted living or full blown nursing care. Yeah, I mean, there's a good chance of that, right.

Marc Killian  08:37

I mean, the numbers are what they are, we're living longer, it's adding more to it. So certainly worth having a conversation. And during the holiday season, I mean, maybe not the most fun of conversations, but when everybody's together, you know, you know, have some of those chats, right? So to kind of bring some of those things out, especially if you've got elderly parents. I mean, I'm, you know, I'm 52 Tony and my mom's 82. And, you know, those are conversations, we start having more now versus various little things like that, right? Because it's just part of life, right? So it's part of life,

Tony Mauro  09:05

and I'm sitting down with my own son this this Christmas, because believe it or not, you know, I've got to think a little bit about succession planning. I mean, I'm not going to be around forever. And I gotta be thinking about my clients that if if something happened to me early, you know, who's gonna take care of the clients, I got to make sure that that's done. And so, again, that's a little more on the business, but kind of a long,

Marc Killian  09:31

extended family though, right? Yeah. Yep. So you're looking out for your clients, aka extended family. That's pretty cool, right? I mean, so businesses want to make sure that's another thing too, when you're working with a finance professional, you know, the the industry is really aged right? About that for years. They're starting to be younger people coming into it. But if you know if you're working with an elder, elderly advisor, make sure they get a succession plan as well so that your something happens to him. You know, my CPA was that way. He kept telling only for a couple of years. He's like, Yeah, I'm getting ready to get ready to retire. And but don't worry, I've got it covered right for someone else to come in. And then of course, it was a nice transition period. And if you're listening to the podcast, and you're wondering why I talked to Tony, every week or every month, twice a month, and he don't use him as my CPA, it's only because I don't live nearby. Oh, yeah. I'm on the other side of the country. But yeah, you know what, it's one of those things, but if you need a CPA, hey, Tony's here to help. As always, don't forget, he's a CFP, and a CPA. So he's dealing with both sides of the aisle. So if you got some questions, need some help, as always, check with a qualified professional before you take any action. And Tony is here to help at your planning proz.com. That's your planning proz.com? What about income and lifestyle? Obviously, a lot of those things we just talked about, Tony are things you're going to need to talk with your professional with. But income and lifestyle is probably some places where we can make a few changes ourselves, without having to get too crazy into it. I mean, I just think about we were talking about Thanksgiving, and where we're at this time of year, and just, you know, home budgeting or whatever, people have been tightening up the belts, because inflation has been rough. I know my wife came home and said, look at the price of this turkey like she was blown away. Right? Yeah,

Tony Mauro  11:09

yeah. And I think, again, at the end of the year is, you know, we're always thinking about those New Year's resolutions, I think one of them should be as you get to the end of the year, put it on your checklist, to maybe review your budget, you know, your monthly spending, also your income, you know, that you've got coming in, and maybe more so with your advisor on. Okay, we didn't have that great of a year, maybe in the markets, are we still on track to you know, meet our goals? You know, that's just a basic, basic thing. And I think that I wish, I guess I don't think I wish I had more clients that really could say, here's how much I'm bringing in every month, here's how much I'm spending the people that are working or retired. And they don't take the time to do that. They just kind of ballpark it. But even if you're ballpark it, it's better than nothing. And I, it's a good time to review that. I also started checking, even though it's kind of a slippery slope, we could talk hours about it. My Social Security earnings statement every year, I like to look at that once a year and just see, you know, what's going on there. And, you know, I can say, there's all kinds of issues coming down the pike with that, and then nevertheless, it's a good thing to check out. Yeah,

Marc Killian  12:20

I mean, we, nobody likes the P word. I get it. When we get close to retirement, we talked about that about a million times, but you still know you have one to a certain degree, right? You don't just super go hog wild. And in with the fourth quarter, you know, holiday shopping, things of that nature, it's just good to have on your end of your checklist to make sure you're keeping it within, you know, the parameters that you set out. That's right, nothing wrong with that. Real Estate, anything there real estate or relocation? I know, obviously, you know, home prices are still high. And, you know, loan rates are still are obviously really high compared to what they had been. But anything there that in case somebody did have this on their radar, you

Tony Mauro  12:56

know, I mean, it's a big decision, you know, but for the people a little closer to retirement, you know, some of them are starting to think downsizing, you know, maybe getting into something smaller, I definitely would talk to your adviser about it. Because it all sounds good. But there are some things to consider, you know, some goods and Bad's of it? And are you really going to accomplish what you need to by doing it. So I think that's a big decision you should talk to them about because it's not as easy as just changing your budget, right? I mean, you got to get to maybe sell a place, buy a place, you get resettled, and you start scratching your head saying, Whoa, what just happened there, and I didn't really accomplish anything. And, but for certain people, it may be in the cards, and it might be something that, you know, you should look at dealing I know, I'm not I think I have myself I have too much house, it's just me and my wife. Right, right. You know, once you once you own it, it's like, well, well, I don't want to I don't want to go to something else right now. So I think there's a lot to that.

Marc Killian  13:53

Yeah, yeah. And even with the prices being higher and things right now, if it was on your you know, kind of your plan and your strategy, just make sure don't just wholesale chuck it just because you know, you're you're here in the you know, home rates are 8% or whatever, right? Have the conversation, look at the numbers because you to your point about downsizing, you may make enough on the sale of your current place, depending on what kind of place you're moving into, you know, that may not be that big a difference. And then of course, you can always refi later on. So, again, just don't wholesale, check it as the at the end of the year here. If it was already on your you're on your radar, at least until you run the numbers again. So we're just wrapping that conversation. All right. From a technology standpoint, Tony? Probably not a lot here. But I think, again, end of the year, holiday shopping, the scammers are out in Megaforce. Right? So be real Cognizant here too, right.

Tony Mauro  14:44

I would say be very, very cognizant, you know, here because it's only getting worse. We see it so much with our clients, and in people scamming on payroll people scamming with credit cards. I've had several clients this year that have had that happened to them. You know, I think we still have a lot of people out there who are writing all their passwords on sticky notes and put them on the back of their computer, you really need to get to some sort of higher level Password Manager, if you will. There's tons of them out there that I think are very good. Yeah, they're not infallible, but they're much better than what you have. And you can you can create different passwords for different sites, and not have to remember them. Just be very, very cautious. I'll give you a perfect example. Although I'm always harping on my staff on this, but I just got an email yesterday in my work email, I get this, it said from a lady's name, that, hey, I need to change my direct deposit information and my payroll account. From I think her name was Wendy Hayward, and it said owner of the tax doctor, and it's like, we don't have any any employees here of that name. Right. I'm the owner of the tax collector. And so I mean, that's a pure scam. Yeah, you know, and they come in and I just had a, we had a payroll client, we do do some payrolls for small businesses. He got scammed off of one of his employees. And our client input A scammers direct deposit information into his employees accounts. He thought it was from his employee and paid out like $500 to a scam. There's no way to get that back. So I mean, it happens to it. It's really happening in a lot. Oh, it's so guy. Yeah. Oh, I just got to be careful. Yeah,

Marc Killian  16:32

my mom about two weeks ago, sent me a message and said, Hey, Amazon said that my my prime membership was going to end. And I was like, I've never seen or it was going to end it was, you know, something with renewal or whatever. I was like, I've never seen them, email me about that. Come to think of it. And that was like, can be a scam. Don't Don't, don't click on anything. If you're worried about it, contact them directly, right? And just make sure everything's groovy. So she did. And of course, it turned out to be a scam. And about the same time she messaged me to tell me that yeah, it was a scam. I had gotten a similar email, like the day before. And I was like, Yep, they're just out there trying to say, Oh, your prime memberships up. So click here to renew and, you know, the Nick just tried to get your information. So never click on anything, when you get those emails, even if it looks pretty legit, folks, if you're not quite 100%? Sure, just go directly to the horse's mouth and checking to make sure that sort of did reach out to you if so. All right, final one general wealth considerations, or excuse me, General, generational, say that three types, generational wealth considerations, anything to explore here, I know, we were talking about RMDs earlier, this could be where maybe the QCD comes into play for people like the qualifying charitable donation.

Tony Mauro  17:38

It does, you know, I think as you age, this becomes more and more important, you know, because you're seeing the potential and it can be anything about, you know, talking to your advisor, about maybe gifting you know, to your heirs, if that's what you want to do, I definitely think on a legal and estate planning standpoint, you should at least pull out your wills and some of your your documents, your legal documents, make sure they're in order at least once a year and make sure you know where they're at. And that your attorney has copies, you got the financial power of attorneys, that advanced directives, all of that kind of stuff. Because stuff does change, you know, and then you can easily update it and put that on the list for the next year, as is what I'll say. Yeah. And

Marc Killian  18:18

you just you just mentioned that yourself, right? People make you know, you had that conversation about your with your son, right, you had that own your own issue there. So and you do this all the time, so it's easy to forget. So bring it up, remind you know, your professional your visor, and don't forget to change them on all of the things to your point, right? There's so many little things you can we tend to think about it like what the will or something like that. But don't forget, there's all these little accounts that you need to change your beneficiaries on. If something changed. That's correct. Yeah. Yeah.

Tony Mauro  18:43

I mean, as long as you got a checklist, and you're getting better and better at it each year, and adding stuff to it, then you're going to be in really good shape. It's just you got to go through the exercise each year and start hitting some of this stuff. Hopefully, the advisors got a list for you, you know, and you can, you can basically just answer their questions, you know, and if there's something missing, and you fix it, it's and you move on.

Marc Killian  19:05

Yeah, absolutely. So if you got some questions, you need some help, definitely reach out to Tony and have a conversation for some end of the year planning items to consider. And of course, you can find them online at your planning proz.com That's your planning proz.com He has been helping folks for 30 years get two and three retirement. He's a CPA and a CFP, as well as an EA so reach out to them have a conversation of your own at tax Doctor Inc. And of course you can you can find them online at your planning proz.com Hit the subscribe button for Apple, Google or Spotify. Whichever podcasting app you'd like to use the plan with the taxman and you get new episodes as they come out. Tony my friend thanks for hanging out buddy. Have yourself a great Thanksgiving. And I look forward to talking to you in December. All right, you do the same Have a great one. Yes sir. And we'll catch you next time right here on playing with the text me and Happy Holidays everybody.

Walter Storholt  19:59

Security is offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.” – Eleanor Roosevelt… Ever wish you could foresee financial missteps before they happen? In today’s episode, explore some real-life stories of regret and arm yourself with the essential dos and don'ts to ensure your money works for you, not against you.

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

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Transcript: 

Marc Killian  00:00

Learn from the mistakes of others because you can't live long enough to make them all yourself a quote from Eleanor Roosevelt. And certainly we've all been in that place before where we wish we could see something coming down the road before we make that mistake and step into it. And that's what we're going to talk about this week here on plan with a tax man, we're going to share some conversation around real life stories or regrets of folks and when it comes to money, mistakes, and hopefully how to avoid them with Tony Morrow here on playing with the tax man.

00:28

Look up in the sky. It's a bird.

Announcer 2  00:30

It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.

Marc Killian  00:45

Hey, everybody, welcome into the podcast. It is planned with the tax man with Tony Morrow and myself to talk money mistakes that you might regret and hopefully how to avoid them. So if you've got some questions, need some help reach out to Tony, he's been helping families for 27 plus years working his way towards 30 here. So been doing this a long time great resource for you to tap into. And if you've got those questions, find them online at your planning proz.com. That is your planning proz.com and get yourself a complimentary review and consultation underway with Tony and his team at tax doctoring. What's going on my friend? How are you?

Tony Mauro  01:18

I'm good. I'm enjoying the fall. And it's November. Yeah, be the holidays here before we know, I know. That's always fun time.

Marc Killian  01:26

I think October was like on. I don't know, okay. It's like us on speed dial or something that was like pure. October. Right, by right. And, and here we are into into November already. So yeah, you before you know it, the year will be over. And it's winding down fast. So yeah, it's that time of the year, right. What is one thing after the next, you know, next thing, it was Halloween, and it's gonna be Thanksgiving, man, it's gonna be Christmas, and New Year's, and boom, it's all done. So let's talk about some money mistakes. Because hey, I mean, this time of year, people also spend a little bit more too. So that can be one as well can be like a bonus one. But I'm gonna get a few I wanted to go through Tony, just share some of your experiences with some of these things and things that folks might be able to pick up some useful nuggets from here. So let's start with the IRA IRA withdrawals Say that three times fast is kind of hard, and maybe taking out money like early right. So I talked to many advisors, Tony, and a lot of them will say this, they almost all say the same thing. If you have to access some money for like an emergency, or something's going on the last place most of them recommend you do this is taking premature IRA withdrawals. Do you agree with that, and why?

Tony Mauro  02:37

I do agree with that I see it all the time, this is a big one. So I'm excited to talk about it, it's, it's definitely not a good idea to take money out of the IRA for most things, basically, you know, the easy ones are, well, you're gonna have to pay tax, and you're gonna have to pay the penalty in depending on your tax bracket that that could be big. But the bigger thing is, is what people don't think about is the last earnings. And I like to run right to the numbers, extrapolate out what they're going to take out over the next, you know, I don't know, 1015 20 years, however, however long they've got left. And say, besides all that, here's what you're going to, you know, you're going to miss out on and you're going to have to try to make this up. I have an example of a an accounting client, she makes a lot of money. She emailed me about a week ago and asked if my husband and they're in the 32% tax bracket. If my husband takes out 500,000 Out of our IRA, what kind of tax would we have? Okay, I talked to her right out of it. I said, Well, besides the big penalty, and taxes that you guys as income level, here's your 500,000. If we extrapolate that out to your 65 Here's what it would have been? How are you going to make that up? And what's this money for? And you know, what you said was, well, we're thinking about buying some rental properties. I

Marc Killian  03:54

said, but just you've got the means borrow the money, you know, and pay them off early. So because I mean, you're you're pulling it out of there, you're paying the tax, right? You're paying the penalty if you're not the right age, and you're taking it taking away the ability for that to continue to grow, right?

Tony Mauro  04:09

To tend to grow, you got to start over, right. And it's like, you know, Boy, that's a big hole to get into. Yeah, and I think people don't realize it, and I like to do that with them and try to I really strongly try to talk them out of it at the end of the day. Some of them do it. But I think part of it the penalty. You know, that's the big slap in the face right now, but the one they don't realize is now I don't have any you got to start over for retirement. I don't I don't like that at all. Yeah,

Marc Killian  04:35

yeah, it's a tough, you know, especially even when you think about the idea of, and I know there's different accounts for different rules for different accounts, but like even borrowing taking a loan against one of your retirement accounts, right? Yeah, take a loan against it. pay it back. But it's like, how often do we truly pay ourselves back on time, right, we'll find an excuse or there's a way easily for us to go well, this didn't happen. So I won't do that right now. Or and then what happens if you change jobs? While you've got that pullback, right, they treat it as a, they now treat it as a distribution, correct?

Tony Mauro  05:04

Yeah, they treat it as a distribution. I would say, you know, if I always tell people, let's stay away from the 401 K bar at

Marc Killian  05:11

all. Yeah, right, let's you have no other options. Right, exactly.

Tony Mauro  05:16

And then and then if take a loan out against the 401k, if you have that ability, rather than a withdrawal, because I just think there's too many negatives to that to make that worthwhile. Okay,

Marc Killian  05:27

fair enough. And again, so that's a money mistake that you might wind up regretting. So let's just try to avoid it. And there's a lot of options that we sometimes don't think of. And that's where a qualified Pro, like Tony can help you look at different avenues, like he just described, in ways to maybe, you know, take care of whatever the problem is that you need to access these funds for, alright, it's the number two, something called Lifestyle creep. And anybody who's ever worked on a project to home project or renovation, they're familiar with probably the term scope creep, which is the scope of the project, right? Got out of hand, like you said, Okay, we're gonna remodel this bathroom, it's gonna, we're gonna spend $5,000 on it. And the next thing, you know, you're like, Man, this is getting out of control, right? Especially if you do it yourself. And so the lifestyle creep Tony is and I know, you're familiar, this, but for our listeners, it's, you get into your, let's say, late 40s, early 50s, the kids are coming off the payroll, you're probably making the most money you've ever made. And you're starting to treat yourself a little bit, right, like, maybe you got the sports car, after all, or started to get me, you know, not necessarily waiting for full retirement, you're actually just kind of doing more things because you've got some extra income now that the kids are off the payroll. And that can be great. But just be careful that it doesn't creep out of control, right? Because there's the future you again, don't forget about future you stand and 20 years down the road waving at you going, Hey, don't spend all my money, right?

Tony Mauro  06:44

That's right. And everybody's guilty of it. And I think the biggest piece of advice I can offer it, and we've all been there. So you can't you can't change what happened yesterday, but you certainly can plan and the key word is plan, have a plan. And make sure if your lifestyle is getting out of control that you talk to an advisor about, you know, making sure that okay, I've got all my bases covered for the future you like talking about and make it as long as that's being addressed, whether it's retirement, emergency funds, some other things, and you still have some money. There's nothing wrong with you know, going out and enjoying yourselves by any means or exactly. I think the biggest thing that catches people is their lack of planning and thinking out toward the future. And that's, that's where they started getting rich

Marc Killian  07:30

indeed. And you know, you might even justify and say, hey, it's my money, I've earned it. You know, the kids are out of the house, everything said, I'm going to enjoy it while I can. Because I'm not going to necessarily wait until I'm old and feeble. Right? I've heard that said a ton of times by some friends. Yeah, that's like, okay, but old and feeble. You if you're convinced that that's happening, it's still coming and old and feeble, you is going to need money. Just to live, right? Yeah, just the same as you do right now. So just I'm not saying don't do it. I'm just simply saying, find the balance, and a good strategy and a good spending plan, whatever you want to call it, even in you're still working yours is a good idea, just so that you know that hey, I'm still paying future me a percentage, but then I'm still gonna have a little bit for this, you know, for fun now, too. That's all that's all we're asking is just to have a strategy. Yeah, yeah, have a strategy and a plan, because that is a money mistake that might bite you in the you know what, all right, number three, this one might bite a lot of people too. And we saw this get really bad for a while Tony, and it's probably still going on. And that's paying too much for the kids, you know, college education, and it comes back to bite us. We've gotten a ton of emails here on the program, where it's been, like, you know, through your website, where it's been, like, hey, I want to help my kids with college, but I don't want to sacrifice my retirement. And that's the right mindset to have. Don't sacrifice your time, but find that balance again.

Tony Mauro  08:47

It is, I think, too many 20 parents, I have some of my own family, and we all know him about and even, you know, I with my own son's education, you know, you spend a lot of money, if you're gonna pay for it for them on the education. And sometimes I get parents saying, Boy, I spent, you know, say $100,000 on my son's education. And he's not even using this degree. And, boy, I really made a mistake. I don't think it's your mistake, per se. Number one, maybe yeah, maybe you might have chose a different school or whatnot. But again, it's done. So you got to move forward. I think I hear a lot of parents to doing this. And, of course, this is all personal preference. But you know, you've got your son or daughter to 30 years old, and you're still paying for their rent or their car and their cell phone and it's all personal. So it's a tough conversation to have people because I'd like to just say, why are you doing that? You shouldn't do that. You know, because that to me, they're not gonna learn anything. They gotta learn what life's about and everything else but everybody has a really touchy opinion on this

Marc Killian  09:50

short so skin in the game. Yeah, skin in the game is not a bad idea. I think a lot of us can agree and even if you don't, even if you are your type of parents cuz I want to do everything for my kid that I can because I didn't get it or whatever. Hey, that's commendable. But do you really think I tried to frame it like this? I mean, with our daughter the same thing. It's like, you know, she got to a certain point, she was still here at home. And I was like, You have got to get off the couch and do something. Right. And she did. She's She joined the military. And she's doing great and couldn't be more proud of her. But I was like, because do you want us couch surfing on your couch when we're 65? Right? Because if we sacrifice too much for you, guess what's going to happen when you're now in your 40s. And you've got your family and you're trying to take care of the things you need. And here comes mom and dad that live on your couch or in your basement because they gave you everything they had when you were younger, right? Yeah, that's good point. It's a good point, it's a cyclical thing you got you got to find the balance. Otherwise, you're couchsurfing on their couch when you're old. And they're not going to want that any more than you are. So just be careful. Find the balance. Number four, oops, I did it again. That's Britney Spears. But I retired a bit too early, Tony. And it's costing me so longevity risk is something we've talked about many times on the program here, the longer we're on the earth, the more we're subject to different kinds of financial risk, right? tax risk, inflation risk, and so on and so forth. market risk, right? Well, if you retire early, that's even it's kind of like longevity risk on steroids. Because now we're retired even longer doesn't mean you can't retire early. But man, you really need to have a plan. If you're gonna,

Tony Mauro  11:23

you do. And it's another issue. And of course, I sound like a broken record and was saying you need to work on advisor because this is one area that if you retire early and you don't have a plan, then it could really come back and buy it. And then if you wait too long to catch it, you don't have the ability to maybe even work but I wouldn't say, you know, if you retire too early, and it's caution you work with your advisor again, you always have options, I'm sure, yeah, you're you're gonna have less soul security. And, you know, you're you might be living off savings. But if you have the ability to work or whatnot, you certainly can go back and, and work a little bit and change some things. So it's not the end of the world, if you don't let it get too far along, you know, and then yeah, you're unable to work.

Marc Killian  12:09

And that's totally fair, if you've got a strategy for it. But if you retire early, and just say, I'm living off, you know, the, you know, just gonna be living off the things that we've done. And so security, and then you realize it's not enough, yeah, your options do get a little dwindled. Yes, you can go back to work, but you're probably not getting the same exact job back and the same exact pay, right. So you know, maybe kick that one out of your head there a little bit. But just bear in mind that there's, there's a plan and an option if you have one. But if you just wing it, be careful, because you're going to have that lower level of accumulated savings, you're going to be starting to draw down those savings earlier, which means you got to live on them longer. And of course, to your point a second ago, you're taking the haircut on Social Security by taking it early, right, I just saw something somebody ran the math and was doing something the other day and said, just delaying retirement three years, like did like a huge number of difference to the retirement income was like some staggering like 40%, like, increase their chances like like 40% of reaching longevity and reaching the things that they were trying to accomplish with their plan. It was pretty staggering was pretty interesting, just three years.

Tony Mauro  13:13

So but and today with with advisors, you know, we have it as well as if we can gather a client's information about here's where they're at now, even if they're say they're in their, I don't know, late 50s, early 60s, and you know, use the software with what they have now. And basing that on, you know, if you delay it, say they want to retire 65 versus 68, or 69. And how much more money they would have. Yeah, how long that would last? And yeah, you can get that information extremely quickly. Yeah, you could

Marc Killian  13:43

run scenarios, right? You can, you can plug in a number of scenarios and go, Okay, I want to retire at 62. What happens? versus 67? Well, let's plug that stuff in and find out right, exactly, yeah. And then. Yeah, then you're armed with the information. And you can go all right, do we because what happens in many folks know this, right? Obviously, it's pretty common sense. As we go, we justify in our head, Tony, we go well, if we cut a little here and we cut a little there, we could still make this retirement early thing work. We just have to sacrifice a little bit for you know, it's like, Okay, fine. But really check in ask yourself and think about that. You want to do that before you actually put it to put pen to paper, right? You can't change it. I mean, advisors say, Hey, you want to try it live that way for a few months while you still got the job? And see how exactly, you see how it goes. Yeah, exactly. And that way you get a trial run. And you can go nude. That was a bad idea. Yeah, that's right. And you haven't made anything permanent. Alright, one more. We'll wrap it up here this week on some money, mistakes you might regret and how to avoid them. Many folks obviously frustrated with the fact that that we didn't take advantage of different kinds of tax buckets along the way. We talked on our last podcast in many times. Tony, one of the biggest things is we've been taught for years and years now to pump money in the 401k you and defer, defer defer. And that's fine. But at some point, people start to realize, oh, maybe some tax free options or some different taxable options may have been a good idea as well, right. So not just one or two income streams, but also one or two, or three, you know, kind of taxable buckets.

Tony Mauro  15:16

Yeah. And I think a lot of times people overlook, and they don't understand is the here's some terms, because it's starting to become a little bit better known. But depending on somebody's age, we talk a lot about, well, if you're not, you know, too close to retirement, you know, there are some options where we still can go back and capture some of this, we can, we can convert to Roth IRAs. And of course, they're going to pay some taxes now, but then you don't have that IOU later, you can start just contributing to a Roth IRA if you'd like. So, it's important to understand some of the ins and outs of those, especially if you've got large 401k balances, you can really do a lot with the backdoor Roth IRAs and filling up tax brackets and getting that stuff from a tax deferred bucket over to tax free bucket and makes a lot of sense. And a lot of cases. Yeah, for sure.

Marc Killian  16:08

And you know, if you're one of the things that doesn't get talked a lot about Tony, and then we'll wrap it up with this, but a lot of folks have been hearing about the conversion conversation, let's do some conversions. Let's get you know, pay the taxes now and grow it and fine. Just make sure you're doing it with money you don't need immediately, right? Because one of the things that doesn't get mentioned as often is that when you do that there is a five year hold correct. There is

Tony Mauro  16:29

a five year hold. So yeah, you got to make sure again, to not try to navigate this on your own and make a mistake, and you don't even know you made it till it's too late.

Marc Killian  16:37

So just to clarify that for folks to break it down. Let's say they converted $100,000 from a from a 401 k or a traditional IRA to a Roth. And they paid the taxes now, right? They did the conversion, they can't withdraw that 100,000 from the new Roth account for five years. That's correct. If they do they're gonna they're gonna have some issues. Okay. All right. So it's gotta be later money. So again, tax strategy, right? Just like your stock market stuff. It shouldn't you shouldn't have, you know, maybe too much in there. Depending on your age. You need now money's and later monies. And you also need that same kind of strategy with taxes, you need some maybe maybe some now taxes and some later taxes, right. So it's all a matter of having a good plan to get you to and through retirement. That's what Tony does day in, day out. For many, many years. Now a great resource to tap into. He is a CPA, a CFP, and an EA with tax, Dr. Inc. And if you need some help reach out to him. You're planning proz.com You're planning proz.com. He's got clients all over the country. But he co hosts he works out of the Iowa area and services folks right here in Iowa. But he's got clients all around. So if you need some help, and you checking out the podcast, don't forget to subscribe to us. And also reach out to him and ask him questions before you take any action on anything you hear on our show or any others see how it relates to your unique situation. So give him a call if you'd like 844-707-7381 or just stop by the website. You're planning proz.com And subscribe to plan with a tax man on Apple, Google and Spotify. Tony, thanks for hanging out, buddy. All right. We'll

Tony Mauro  18:03

see you later and have a great holiday.

Marc Killian  18:04

I always appreciate you my friend. We'll talk to you soon. I think I'll see you before right before Thanksgiving. So we'll probably do one more of these before the month ends. But you folks Yeah, have a great month and we'll see you here soon on plan with the tax man with Tony Morrow.

18:23

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